Porter's Five Forces Model 1. Buyers 2. Supplier 3. Substitutes 4. New entrants 5. Existing rivals Identifying competitive advantage Competitive advantage-Product/service that an organisation's customers place greater value on a similar offering from a competitor. Business strategy- a leadership plan that achieves a specific set of goals or objectives eg -developing a new product or service -entering new market -increasing customer loyalty -attracting new customers -increasing sales First Mover advantage- occurs when an organisation can significantly affect its market share by being first to marker with competitive advantage Eg Blackberry to iphone Competitive Intelligence-process of gathering information about the competitive environment to improve company's ability to succeed. Supply chain- A network of organisations and business processes of transforming raw materials into intermediate and finished products and distributing the finished products to customers. Value Chain-views the company as a series of business process that each add value to the product or service.
Broad Scope Narrow Cost Leadership Differentiation Cost Focus Differentiation Focus Cost Differentiation Source of Competitive Advantage
Porter's Generic Strategy ... Target Scope Broad (Industry wide) Narrow (Market wide) Advantage (Low Cost) Cost Leadership Focus Strategy (low cost) Advantage (Product Uniqueness) Differentiation Focus Strategy (differentiation) Cost Leadership strategy Cost Leadership is about minimizing the cost to the organization of delivering products and services. Differentiation strategy Differentiation involves making your products or services different from and more attractive than those of your competitors. To make a success of a Differentiation strategy, organizations need: · Good research, development and innovation. · The ability to deliver high-quality products or services.