CHAPTER TWO : IDENTIFYING COMPETITIVE ADVANTAGE

What is competitive advantage?

• A product or service that an organization's customers place a greater value on than similar offerings from a competitors.
• Unfortunately, CA is temporary because competitors keep duplicate the strategy.
• Then,the company should start the new competitive advantages.

INTRODUCTION

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

                                              

• Buyer Power

-high :when buyer have many choices of whom to buy.
-low :when their choices are few.
-to reduce buyer power,an organization must make it more attractive to buy from the company not from the competitors.

• Supplier Power

-high :when buyer have few choice of whom to buy from.
-low :when their choices are many.
                                                           

• Threat of substitute product and services.

-high :when there are many alternatives to a product or service.
-low :when there are few alternative from which to choose.

• 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.

• Rivalry among existence competitors

-high :when competitors is fierce in a market.
-low :when competitors is more complacent.