chapter two : IDENTIFYING COMPETITIVE ADVANTAGE

hello there! I'm starting this chapter by defining WHAT is competitive advantage (CA).

According to the slide given, it is defined as a product or service that an organization's customer place a greater value than similar offerings from a competitor. But, we have to realize that CA is temporary because the competitors keep duplicate the strategy.

Now we are going to discuss about the forces model. There are five forces in Porter's Five Forces Model, which is :

1) Buyer power.

• High - when buyers have many choices of whom to buy.
• Low - when their choices are few.
• An organization must make it more attractive to buy from the company and not from the competitors in order to reduce buyer power. 

2) Supplier power.

• High - when buyers have few choices of whom to buy from.
• Low - when their choices are many

3) Threat of substitute products and services

• High - when there are many alternatives to a product or service.
• Low - when there are few alternatives from which to choose.
• Basically, an organization would like to be on a market in which there are few substitutes of their product or service.

4) Threat of new entrants 

• High - when it is easy for new competitors to enter a market 
• Low - when there are significant entry barriers to entering a market
  *entry barriers is a product or service feature that customers have come to expect from organizations
     and must be offers by entering organization to compete and survive

5) Rivalry among existence competitors 

• High - when competition is fierce in a market
• Low - when competition is more complacent

 Have you ever heard about Porter's generics strategies? Here you go.

Three Generics Strategies :

1) Cost Leadership

• becoming a low-cost producer in the industry allows the company to lower prices to customers.
• competitors with higher costs cannot afford to compete with the low-cost leader on price.

2) Differentiation

• create competitive advantage by distinguishing their products on one more features important to their customers.
• unique features or benefits may justify price differences and stimulate demand

3) Focused strategy

• target to a niche market 
• concentrates on either cost leadership or differentiation.

wise word, you think? 

That's all for now. Till then, see ya! :)