•To survive and thrive an organization must
create a competitive advantage
–Competitive advantage – a product or service that an
organization’s customers place a greater value on than similar offerings from a
competitor
–First-mover advantage – occurs when an organization
can significantly impact its market share by being first to market with a
competitive advantage
•Organizations watch their competition through
environmental scanning
–Environmental scanning – the acquisition and analysis
of events and trends in the environment external to an organization
–
•Three common tools used in industry to
analyze and develop competitive advantages include:
–Porter’s Five Forces Model
–Porter’s three generic strategies
–Value chains
Buyer
Power
•Buyer
power – high when buyers have many choices of whom
to buy from and low when their choices are few
•
•One way to reduce buyer power is through
loyalty programs
–Loyalty
program – rewards customers based
on the amount of business they do with a particular organization
•
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