~Mgt 300 come back ! ~
Previous post we learn about IT right? Today i'm gone share with you how to Identifying Competitive Advantage, and what is Competitive advantage ?
To survive and thrive,an organization must create a competitive advantage.What do you know about CA ? Competitive Advantage is a product or service that an organization's customers place a greater value on than similar offerings from a competitor.Unfortunately,competitive advantage are typically temporary because competitors often seek ways to duplicate the competitive advantage.
When organization is the first to market with a competitive advantage,it gains a first-mover advantage. The first mover advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage.Besides that,they must pay close attention to their competition through Environmental Scanning.
Environment Scanning is the acquisition and analysis of events and trends in the environment external to an organization.
The Five Forces Model-Evaluating Business Segments:
Helps determine the relative attractiveness of an industry and include the following five forces:
1)Buyer power.
-Analyzing the ability of buyers to directly impact the price they are willing to pay for an item.The factors used to assess buyer power include number of customers,size of orders,difference between competitors,sensitivity of price and availability of substitute products.One way to reduce buyer power is by switching costs.
Switching costs are costs that can make customers reluctant to switch to another product or service.For example : switching doctors is difficult because the new doctor will not have the patient's history and the relationship with the patient.Another example is to expand and improve services so it is harder for customers to leave,by doing a loyalty programs (reward customers based on the amount of business they do with particular organization.
2)Supplier power.
-Is assessed by the suppliers' ability to directly impact the price they are charging for supplies (including materials,labor and services).If supplier power is high the supplier can directly influence the industry by:
a)Charging higher prices
b)limiting quality or services
c)shifting costs to industry participants.
3)Threat of substitute products or services.
-High when there are many alternatives to a product or services and low when there are few alternatives from which to choose. Example :there are many substitute products in the airline industry..
4)Threat of new entrants
-High when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market.
RIVALRY AMONG EXISTING COMPETITORS.
-High when competition is fierce in a market and low when competition is more complacent. Most implement loyalty programs to provide customers special discounts.
Besides that, mgt 300 also have the three generic strategies... Where this topic is explain about the cost strategies. In other hand, we also learn about value chain analysis in which we have value creation..A business process is a standardized set of activities that accomplish a specific task,such as processing a customer's order. Futhermore, the value chain approach views an organization as a series of processes,each of which adds value to the product or service for each customer.
So,the conclusion is we need to know how to identify the competitive advantage and know how to solve it..
Okay,night is still young..but my eye is so sleepy.. this my summarizes about MGT 300 in this topic..
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