9. Competitive Factors

Question 1

What are 3 steps of analysis to determine if company has competitive advantage?

Answer 1

1 main compet. Forces in industry ?
2 how company can gain advantage ?
3 how activities and departments in business contribute to its competitiveness?

Question 2

What are key areas to look at to determine profit in industry?

Answer 2

Porter’s 5 forces

1 existing competition- great if slow growth, similar size & high fixed cost

2 new entrants- barriers include economies of scale, patents, gov policy, capital requirements, prod differentiation

3 power of buyers- great where is lot buyers, substitutes are available, low switching cost

4 power of suppliers (opposite) customer is not important, prod. Diff.

5 substitutes - across industries and within (transport, milk)

Question 3

What is value chain ?

Answer 3

Model developed to determine business competitive adv. breaking down into 5 primary and 4 supporting activities.

Question 4

What are 5 primary activities ?

Answer 4

Inbound logist.—operations—outbound logist.—sales/mark.—service

Question 5

What are 4 supporting activities in chain?

Answer 5

Business infrastructure
Technology used
HR development
Procurement (other purchase ex.land)

Question 6

What are strategies to gain comp. advantage ?

Answer 6

Cost leadership ( selling at same/lower price but making more

Differentiation- convince customers that my prod. is better

Focus on segment of market

Question 7

What is SWOT analysis?

Answer 7

Internal+external

Focus on threats and weaknesses to remove them

Analyse strengths and opportunities for development