CHAPTER 2 : IDENTIFYING COMPETITIVE ADVANTAGES

To survive and thrive an organization must create a competitive advantage
- competitive advantage
   a product or service that an organization's customer place a greater value on that similar offerings from a
   competitor. For example, company A produces the same product with the company B but company A
   produces slightly different with the B.
- first-mover advantage
  Is the first company to produce a product. For example, the Air-Asia in the first company to produce a
  package to Indonesia, Bandung, and Sarawak with low prices.

Environmental scanning - the acquisition and analysis of events in the environment external to an
                                      organization. we can not just look at the individual company but we need to see in
                                      the environment external to an organization

Porter's Five Forces Model

Buyer Power
Buyer power - customer power.  For example, a customer, a lot of sellers. so the customer can choose
                       whether to buy at the store which one and for situations where a vendor, customers, clients
                       have to also buy the seller because he was the only vendor there.
One way to reduce buyer power is through loyalty programs.
Loyalty program - though expensive, but worth it.

Supplier Power
Supplier power - when not a lot of options. for example, when floods in the states of Kuantan, the dealer will
                           raise prices because many stores have closed. So, customers have also bought in the store
                           expensive.
Supply chain - parties involved in the selling of raw materials. for example manufactured.

Threat Of Substitute Products Or Services (replacement products)

example : glasses replaced with contact lens, milk replaced with cream
switching cost - if change any other service, will not be able to service the same like haircut.

Rivalry among existing competitors - there is no competition. For example TNB, Telekom, food industry, car
                                                        industry.

THE THREE GENERIC STRATEGIES - CREATING A BUSINESS FOCUS

                  

               Low cost                      High cost

WALMART Ex : Tesco, Mydin -    cheap prices, everyone can go there, all items have	NEIMAN MARCUS Ex : Lorenzo, E-kia -     to customers who want a unique, extensive market
PAYLESS SHOES Ex : Bata      -     focus on selling only shoes	TIFFANY & CORBRAY Ex : Reflesia       -     have a own differentiation,focus on jewelry only

 Broad

 Market

 Narrow

 Market