Competitive Advantages Flashcards
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
Competitive intelligence
The process of gathering information about the competitive environment to improve the company’s ability to succeed
Environmental scanning
The acquisition and analysis of data about events and trends in the environment external to an organization
What are the components of the 5 forces model?
1) threat of substitute products or services
2) buyer power
3) threat of new entrants
4) supplier power
5) rivalry among existing competitors
Buyer power(customer power)
the ability of buyers to affect the price of an item
Loyalty program
Rewards customers based on the amount of business they do with a particular organization
Switching cost
Cost to customers of switching to another product/service
Supplier power
The suppliers ability to influence the prices they charge for supplies
Supply chain
Consists of all parties involved in the procurement of a product or raw material
Threat of new entrants
High when it is easy for a new competitors to enter a market and low when there are significant entry barriers
Entry barrier
A feature of a product or service that customers have come to expect and entering competitors must offer that same for survival
Threat of substitute products or services
High when there are many alternatives to a product or service and low when there are few alternatives
Rivalry among existing competitors
High when competition is fierce in a market and low when competitors are more complacent
Product differentiation
Occurs when a company develops unique differences (or perception of differences) in its products or services with the intent to influence demand
