identifying competitive advantage Article


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Cohesion Case: Competitive Advantage: Business Dilemma

To outlive and prosper, an organization must create a competitive advantage. AВ В competitive advantageВ is a product or service or assistance that an company customers place a greater value on than similar offerings from a competitor. Sadly, competitive advantages are typically short-term because competition often search for ways to duplicate the competitive advantage. In return, organizations need to develop a technique based on a brand new competitive edge. When an corporation is the first to market with a competitive edge, it profits a first-mover advantage. TheВ В first-mover advantageВ occurs for the organization can significantly influence its market share by being initially to market which has a competitive advantage. FedEx developed first-mover edge by creating its customer self-service software, which allows people and businesses to obtain parcel pick-ups, print sending slips, and track parcels online. Various other parcel delivery companies quickly began creating their own online services. Today, customer self-service on the Internet is a standard for conducting business in the courier delivery business. Page 13

As agencies develop their very own competitive advantages, they must seriously consider their competition through environmental scanning.   Environmental scanning is the acquisition and analysis of events and trends in the environment exterior to an business. Information technology has the opportunity to perform an important position in environmental scanning. Frito-Lay, a premier provider of snack foods including Cracker Aiguilles and Cheetos, does not just send it is representatives in grocery stores to stock racks; they take handheld pcs and record the product offerings, inventory, and even the product locations of their opponents. Frito-Lay uses this information to find business intelligence everywhere from just how well competing products can advertise to the proper placement of its products. Agencies use 3 common equipment to analyze and develop competitive advantages: (1) Five Causes Model, (2) three general strategies, and (3) worth chain research. THE FIVE FORCES MODEL—EVALUATING BUSINESS SECTORS

Cohesion Circumstance: Competitive Edge: Making Business Decisions I AYK Job: Porter's Five Forces

Michael jordan Porter's Five Forces Style is a useful gizmo to aid agencies facing the challenging decision of getting into a new sector or industry segment. TheВ В Five Forces ModelВ helps determine the relative charm of an sector and contains: Buyer electrical power.

Supplier electric power.

Threat of substitute goods and services.

Threat of new entrants.

Rivalry among existing competitors (seeВ Figure 1 . 13).


Porter's Five Forces Version

Buyer Electrical power


Purchaser powerВ in the Five Causes Model can be high when buyers have sufficient choices of who to buy from and low when their choices will be few. You will find two scenarios in the source chain where organizations should be concerned about purchaser power: i) in their interactions with buyers; and ii) in their associations with suppliers (seeВ Figure 1 ) 14). Regarding the relationships with customers, organizations function as suppliers and thus prefer to reduce the buyer power of clients (and make a competitive advantage). In this situation an organization must make it more attractive for customers to obtain from that instead of its competitors. One of the best IS-based examples of this can be the loyalty programs that many companies offer to customers. В В Loyalty programsВ reward customers based on the quantity of business they do with a particular organization. The travel sector is famous for the loyalty applications, such as frequent-flyer programs to get airlines and frequent-guest applications for resorts. Keeping track of the activities and accounts of many hundreds or millions of customers covered by loyalty applications is certainly not practical with out large-scale IS systems. Loyalty programs really are a...