CH 2 CIS 2200 BARUCH WITH VERIFIED SOLUTIONS|GUARANTEED SUCCESS

Business Strategy leadership plan that achieves a specific set of goals/objectives as displaced Competitive Advantage feature of a product/service on which customers place a greater value than they do on similar offerings from competitors Ways companies duplicate competitive advantage acquiring new tech copy the business operations hiring away key employees First-Mover advantage company can significantly increase its market share by being first with a new competitive advantage competitive intelligence process of gathering information about the competitive environment including competitors' plans, activities, and products Five Forces Model Evaluating Industry Attractiveness Buyer Power Supplier Power Threat of Substitute Product/services Threat of New Entrants Rivalry among existing competitors Buyer Power the ability of buyers to affect the price they must pay for an item Reduce buyer power by manipulating switching costs or with loyalty power Supplier Power suppliers' ability to influence the prices they charge for supplies When power is high: charging higher prices, limiting quality/services, shifting cost to industry participants Ways to decrease power: find alternative products or forms groups/collaborate with other buyers Threat of Substitute Products/Services High when there are many alternatives to product/service Reduce threat by offering additional value through wider product distribution Threat of New Entrants Entry Barrier: a feature of a product/service that customers have come to expect n entering competitors must offer the same for survival Rivalry Among Existing Competitors high when competition is fierce in a market overall trend is towards increased competition in almost every industry PRODUCT DIFFERENTIATION: company develops unique differences in its products/services with the intent to influence demand Three Generic Strategies Broad Cost Leadership-large market segment at LOW cost (Walmart) Broad Differentiation-large market segment at HIGH cost (Neiman Marcus) Focused Strategy-Narrow Market:High Cost (Tiffany & CO.) n Low Cost(Payless) Business Process A standardized set of activities that accomplish a specific task firm must choose the business strategy required to create products/services once it identifies its industry it wants to enter n generic strategy it will focus on Value Chain Analysis views a firms as a series of business processes that each add value to the product/service Goal of Value Chain Analysis identify processes in which the firm can add value for the customers n create a competitive advantage for itself with a cost advantage or product differentiation Primary Value Activities Found at bottom of value chain Inbound logistics:acquire raw materials n resources n distributes to manufacturing Operations:tranforms raw materials/inputs into goods n services Outbound logistics, Marketing and Sales Services: after-sales services Support Value Activities Along top of chain Firm Infrastructure: includes company format/departmental structures, environment, and systems Human Resource Management: Provides employee training, hiring, and compensation Technology Development: applies MIS to processes to add value