Topic 5

08/10/2013

-week 5-

Generic competitive strategies

            What are five generic competitive strategies?  Generic competitive strategies are specific efforts to please customers, strengthen its market position, counter the maneuvers of rivals, respond to shifting market conditions and achieve a particular kind of competitive advantage.  There are five competitive strategy options which is a low-cost provider strategy, a broad differentiation, a focused low-cost strategy, a focused differentiation strategy and a best-cost provider strategy.

            Low-cost provider strategy is lower overall costs than competitors.  Successful low-cost leaders are base on, who have the lowest industry costs.  The company has two options for translating a low-cost advantage over rivals into attractive profit performance.  The first option is to use the lower-cost edge to underprice competitors and attract price-sensitive buyers in great enough numbers to increase profits.  The second option is to maintain the present price, be content with the present market share and to earn a higher profit margin per unit.

            Broad differentiation strategies are attractive whenever buyers’ needs and preferences are too diverse to be fully satisfied by a standardized product offering.  In other word, the company will prepare the goods based on higher quality for standardized customers.  Broad differentiation strategy suitable for a customer value proposition that is unique.  Companies can conduct differentiation strategy from many sides like unique taste, wide selection, superior service, luxury and prestige and so on.  There are lots of example for product under broad differentiation strategy like BMW car, Bonia handbag, scholl shoes and others.

            Focused Low-cost strategy is quite similar with low-cost strategy but the only different is about the size of the buyer group.  The size of the buyer group is in a narrow market segment.  Then, focused differentiation strategy is offering products or services based on unique preferences in narrow market segmentation.

            Broad-cost provider strategies are mixing between broad differentiation strategy and low-cost provider strategy. 

Topic 4

01/10/2013

-week 4-

 Evaluating A Company’s Resources Capabilities and Competitiveness

            Today I learn about Evaluating A Company’s Resources Capabilities and Competitiveness.  I get new information in the lecture which is the company will be seen as success company through statement financial, strategic objectives, financial performance above average and market share.

            The first thing I learn is how well is the company’s present strategy working? The companies will moves to attract customers and outcompete rivals via improved product design, better features, higher quality, wider selection and lower prices.  Besides, the companies will also moves to respond to changing conditions in the macro-environment or in industry and competitive conditions.  There are also initiatives from the company to build competitive advantage through lower cost, better product offering and superior ability to serve market niche. The companies have their own effort to expand or narrow the geographic coverage.  The others effort is to build competitively valuable partnerships and strategic alliances with other enterprises within its industry.

            Secondly, I learn about what are the company’s competitively important resources and capabilities?  Resource here means productive input or competitive asset that is owned by the firm.  Then, capability defines as capability of a firm to perform some internal activity competently.  Resource and capability is known as a powerful tool for sizing up a company’s competitive assets and determining if they can support a sustainable competitive advantage over market rival. There are two types of company resource which is tangible and intangible resources.  Tangible resources are those that can be touch or quantified readily.  Physical resources (manufacturing and facilities and mineral resources), financial resources, technological resources and organizational resources also include as tangible resources.  Then, intangible resources are harder to see but they are often among the most important of a firm’s competitive assets.   There are a lot of example of intangible resources such as human assets, brand and reputational assets, relationships, and company culture.   

            Thirdly, I learn about is the company able to seize market opportunities and nullify external threats?  The company able or disable to seize market opportunities by using SWOT analysis.  SWOT analysis means identifying a company’s internal strength, identifying company weaknesses and competitive deficiencies, identifying a market opportunities and identifying the threats to a company’s’ future profitability

            Next, I learn about are the company’s cost structure and customer value proposition competitive?  The company’s cost structure and customer future profitability can be effect by company’s value chain activities.  The company value chain activities consist of primary activities and support activities.  The primary activities consist of supply chain management, operations, distribution, sales and marketing, and service.  Product R&D, technology and system development, human resources management and general administration include in support activities.

            Last but not least I learn about is the company competitively stronger or weaker than key rivals?  The company will be stronger or weaker than the rivals based on product performance or quality, reputation or image, manufacturing capability, dealer network or distribution capability, financial resources, and relative cost position.

Topic 3

24/09/2013

-week 3-

Chapter 3 learned about evaluate company’s external environment.  External environment also can be known as macro environment.  Macro environment is encompasses the broad environmental context in which a company’s industry is situated that includes strategically relevant components over which the firm has no direct control.  There are 6 strategic factors in the macro-environment, which is political factors, economic conditions, sociocultural forces, technological factors, environmental factors, and legal condition.  These factors can be known as PESTEL analysis.

Political factors include political policies and processes such as tax policy, fiscal policy, tariffs, and federal

banking system.  Economic conditions are the general economic climate and specific factors such as interest rates, exchange rates, inflation rates and so on.  Then, sociocultural forces include societal values, attitudes lifestyles, growth rate and age distribution.  Next, technological factors are pace of technological change and technical developments that have the potential for wide-ranging effects on society such as genetic engineering.  Environmental forces include ecological and environmental forces like weather, climate and associated factors.  Last but not last legal factors are regulations and law with which companies must comply like consumer laws and safety regulation.

Framework for competitor analysis includes a rival’s current strategy, objectives, capabilities and assumption about itself and the industry.  Current strategy use to be succeeding in predicting a competitor’s next move, company strategies need to have a good understanding of each rival’s current strategy.  Objective is an appraisal of a rival’s objective should include not only its company financial performance objective but strategic ones as well.  Assessing a rival’s capabilities involve sizing up not only their strength but their weaknesses also.  Assumptions are using to know how a rival’s top managers think about their strategic situation can have a big impact on how they behave.