Bài giảng Business Driven Technology - Chapter 2 Identifying Competitive Advantages

CHAPTER 2Identifying Competitive AdvantagesLEARNING OUTCOMES2.1 Explain why competitive advantages are typically temporary2.2 List and describe each of the five forces in Porter’s Five Forces Model2.3 Compare Porter’s three generic strategies2.4 Describe the relationship between business processes and value chainsIDENTIFYING COMPETITIVE ADVANTAGESTo survive and thrive an organization must create a competitive advantageCompetitive advantage – a product or service that an organization’s customers place a greater value on than similar offerings from a competitorFirst-mover advantage – occurs when an organization can significantly impact its market share by being first to market with a competitive advantageIDENTIFYING COMPETITIVE ADVANTAGESOrganizations watch their competition through environmental scanningEnvironmental scanning – the acquisition and analysis of events and trends in the environment external to an organizationThree common tools used in industry to analyze and develop competitive advantages include:Porter’s Five Forces ModelPorter’s three generic strategiesValue chainsTHE FIVE FORCES MODEL – EVALUATING BUSINESS SEGMENTSPorter’s Five Forces Model determines the relative attractiveness of an industryBuyer PowerBuyer power – assessed by analyzing the ability of buyers to directly impact the price they are willing to pay for an itemWays to reduce buyer power includeSwitching costs – costs that can make customers reluctant to switch to another product or serviceLoyalty program – rewards customers based on the amount of business they do with a particular organizationSupplier PowerSupplier power – assessed by the suppliers’ ability to directly impact the price they are charging for supplies (including materials, labor, and services)Supply chain – consists of all parties involved in the procurement of a product or raw materialThreat of Substitute Products or ServicesThreat of substitute products or services – high when there are many alternatives to a product or service and low when there are few alternatives from which to chooseThreat of New EntrantsThreat of new entrants – high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a marketEntry barrier – a product or service feature that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and surviveRivalry Among Existing CompetitorsRivalry among existing competitors – high when competition is fierce in a market and low when competition is more complacentProduct differentiation – occurs when a company develops unique differences in its products with the intent to influence demandAlthough competition is always more intense in some industries than in others, the overall trend is toward increased competition in just about every industryAnalyzing the Airline IndustryBuyer power: high as customers have many choicesSupplier power: high as there are limited plane and engine manufacturers to choose from and unionized workforces squeeze the airline’s profitabilityThreat of substitute products or services: high as there are numerous transportation alternatives Analyzing the Airline IndustryThreat of New Entrants: high as new airlines are continuously entering the market Rivalry among existing competitors: high –for this reason airlines are forced to compete on priceTHE THREE GENERIC STRATEGIES – CREATING A BUSINESS FOCUSOrganizations typically follow one of Porter’s three generic strategies when entering a new marketTHE THREE GENERIC STRATEGIES – CREATING A BUSINESS FOCUSValue CreationOnce an organization chooses its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategyBusiness process – a standardized set of activities that accomplish a specific task, such as processing a customer’s orderValue chain – views an organization as a series of processes, each of which adds value to the product or service for each customerValue CreationCombining Porter’s Five Forces and three generic strategies create business strategies for each segmentValue CreationValue ChainValue CreationValue chains with Porter’s Five ForcesOPENING CASE STUDY QUESTIONSApple – Merging Technology, Business, and EntertainmentHow can Apple use environmental scanning to gain business intelligence?Using Porter’s Five Forces Model, analyze Apple’s buyer power and supplier powerOPENING CASE STUDY QUESTIONSApple – Merging Technology, Business, and EntertainmentWhich of the three generic strategies is Apple following?Which of Porter’s Five Forces did Apple address through the introduction of the iPhone and customer developed iPhone applications?CHAPTER TWO CASEBusinessWeek Interview with Michael PorterIn an interview with BusinessWeek Senior Writer Pete Engardio, Michael Porter explains why he believes globalization has actually made industry clusters and local advantages even more important, rather than weakened themCHAPTER TWO CASE QUESTIONSIn today’s global business environment, does the physical location of a business matter?Why is collaboration among universities important?CHAPTER TWO CASE QUESTIONSIs there a competitiveness problem in the United States?What are the big differences in the way communities approach development today compared to 1990, when Porter wrote The Competitive Advantage of Nations?