CHAPTER 2:IDENTIFYING COMPETITIVE ADVANTAGES

Assalamualaikum,,,here we meet again!!ok for this chapter we will know alot of new thing about business..
               


To survive and thrive, an organization must create a competitive advantage.

Competitive advantage is a product or service that an organization's customers place a greater value on than similar offerings from a competitors.

- When an 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.

- As organizations develop their competition advantages, they must pay close attention to their competition through environmental scanning.Environmental scanning is the acquisition and analysis of events and trend in the environment external to an organization. Information Technology has the opportunity to play an important role in environmental scanning.

- Organizations use three common tools to analyze and develop competitive advantages:

1) the Five Forces Model (MICHAEL PORTER,UNI.PROFESSOR AT HARVARD BUSINESS SCHOOL.

                                              

• The Five Forces Model

- For a business to prosper it must be able to quick respond to all form of competition from its rivals.

- The Five Force Model by Michael Porter helps determining the relative attractivenes of an industry and includes the following five forces:

1. Buyer power is assessed by analyzing the ability of buyers to directly impact the price they are willing to pay for an item.
2. Supplier power is assessed by the suppliers' ability to directly impact the price they are charging for supplies (including materials, labor, and services).
3. Threat of substitute products or services is high when there are many alternatives to a product or service and low when there are few alternatives from which to choose.
4. Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are are significant entry barriers to entering a market.
5. Rivalry among existing competitors is high when competition is fierce in a market and low when competition is more complacent.

                                          2) the three generic strategies

                                  

                                                               3) value chains.