Chapter 2

CHAPTER 2

IDENTIFYING COMPETITIVE    ADVANTAGES

What is competitive advantages??

is a features of a product or service that an organization’s customers place a greater value than they do on similar offerings from competitors.

Unfortunately, it is a temporary because competitors often quickly seek ways to duplicate the strategy.

In turn, the company must develop a strategy based on a new competitive advantage. 

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

 The Five Forces Model ( for evaluating industry attractiveness)

1.   Buyer power

Knowledgeable customers can force down prices by pitting rivals against each other. 

2.  Supplier power

Influential suppliers can drive down profits by charging higher prices for supplies.

3.  Threat of substitute products or services

Substitute products can steal customers.

4.  Threats of new entrants

New market entrants can steal potential investment capital.

5.  Rivalry among existing companies

Competition can steal customers

            The three generic strategies ( for choosing a business focus)

   

                   Value chain analysis (for executing business strategies)