IDENTIFYING COMPETITIVE ADVANTAGE

Hello readers,

Okay last week in subject information technology in business I have learned about identifying competitive advantage. This post I will share information about this topic.

Each business  in this world must have business strategy to compete with our competitor to make our business success and gain profitability.

A business strategy is a leadership plan to achieve specific goal such as :

• Developing new product or services.
• Entering new markets.
• Increasing customer loyalty.
• Attracting new customer.
• Increasing sales.
• Decreasing costs.

Business strategies that match core company competencies to opportunities result in competitive advantage that a key to success.

WHAT IS COMPETITIVE ADVANTAGE ? 

• It is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor.

•     Unfortunately, competitive advantage is a temporary because competitors keep duplicate the strategy.

•     In turn, organization must develop a strategy based on a new competitive advantage.

COMPETITIVE INTELLIGENCE 

Is a process of gathering information about the competitive environment, Including competitor’s plans, activities and products  to improve a company’s ability to succeed.

Managers use 3 common tools to analyze competitive intelligence and develop competitive advantages including:

THE FIVE FORCES  MODEL –Industry Attractiveness

Michael Porter’s Five Forces Model is useful tool to aid organization in challenging decision whether to join a new industry segment.

Buyer Power

-the power of customer to drive.

Supplier Power

-the power of supplier to derive up prices of material

SUPPLIER to COMPANY to CUSTOMER

Threat of Substitute Product and Services

-the power of customer to purchase alternative.

Threat of New Entrants

-the power of competitors to enter the market.

 Rivalry Among Existence Competitors

-rivalry among existing firms are not much of the threats however change in management,ownership or the rules of the game can give rise to serious threats to long term survival from existing firms

THE THREE GENERIC STRATEGIES-Choosing a Business Focus.

1.Cost Leadership

·  ~Low-cost producer in the industry allows the company to lower prices to customer

2.Differentiation

·  ~Create competitive advantage by distinguishing their product on one or more features important to their customers.

·         Eg : i-care by Proton

3.Focused Strategy

• · Target to a niche market
• · Concentrate on cost leadership or differentiation.

RELATIONSHIP BETWEEN BUSINESS PROCESS AND VALUE CHAIN ANALYSIS-Executing Business Strategies.

BUSINESS PROCESS- is a standardized set of activities to accomplish a specific task such as processing customer’s order.

VALUE CHAIN ANALYSIS- view a firm as a series of business process that each add value to the product or service.

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