Topic 2: Competitive Analysis and Strategy in International Markets Flashcards
What is “Competitive Advantage”?
The ability to be more valuable than other firms. An example of this could be having more customers than other firms, or bigger sales margins.
What are 4 different types of competitive advantage?
Cost structure, product offerings, distribution network, customer service
The disposition and competitive advantage is determined by which 2 basic sources?
Resources and Competences.
Define: Resources
Inputs into the business (Financial, Technological, Human, Organizational)
True or False: Resources provide the basis for COMPETENCE BUILDING?
True
True or False: Resources are supposed to be SUCCESS PRODUCERS not FAILURE PREVENTERS
False: Resources are failure preventers NOT success producers
Define: Competences
The combination of the various resources that a company has, the assortment, how the firm INTEGRATES the resources.
Define: Competitive Analysis
The process of gathering and analyzing information about your competitors
What are some examples of the type of information that a company could gather about a competitor if they were conducting a “Competitive Analysis?
Practices, products, trends, strengths, weaknesses
What is the point of “Competitive Analysis?
So a company can find its place in the market, and improve product/marketing strategies.
Define: Competitive Strategy
An aim to establish a profitable and sustainable position against the forces that determines industry competition.
What are the four elements of “Porter’s Diamond Model”?
Factor conditions, demand conditions, related and supporting industries, and strategy-structure-rivalry
What are “Factor Conditions”?
Factors that can be exploited by companies in a given nation. Both good and bad factors are considered to be advantageous.
What are some examples of “Factor Conditions”?
a highly skilled workforce, linguistic abilities of workforce, raw materials, workforce shortage.
What are “Demand Conditions”?
What the home market demands
What is an example of how “demand conditions” has helped shaped a market in a country.
In Japan, the Japanese consumers are extremely demanding of electronics, which helped to spark the success of the Japanese Tech Industry
Related and Supporting Industries
x
Strategy-Structure-Rivalry
x
Why do companies use “Porter’s Diamond”?
So they can analyze which competitive factors may reside in their company’s home country, in order to see which factors should be exploited. They also use it for internationalization in order to see which countries are most likely to sustain growth and development.
What are Porter’s 5 forces?
Competitive Rivalry, Threat of New Entrants, Threat of Substitute Products, Bargaining Power of Buyers, and Bargaining Power of suppliers
What does “Competitive Rivalry” determine?
The degree of head-to-head rivalry in a competition in an industry.
When do “Entry Barriers” exist?
Whenever it is difficult or not economically feasible for an outsider to copy/imitate the existing players competitive capabilities.
What are “switching costs”
costs found by buyers in switching to a rival’s product or service
What are the determinants of Buyer-Power?
The size and concentration of buyers, and how well informed they are about other vendors/suppliers
Bargaining Power of Suppliers
x
Competitive Triangle
x
What is “Competitive Benchmarking”?
The process or technical management with companies or organizations that evaluate the performance of their processes/systems and management procedures with the best practices found in other organizations.
Internal Benchmarking
x
Competitive Benchmarking
x
Generic Benchmarking
x
Strategic Process
x
What are Porter’s 3 generic strategies?
Overall cost leadership, differentiation, Focus
What is “Cost Leadership”?
When a low cost procuer sells a standardized product on a broad range and tries to exploit all resources of cost advantages in order to have the lowest cost.
What is “Differentiation”?
When a firm tries to “set itself apart”, and customers are willing to pay a higher price for a more “prestigious” product.
What is “Focus”?
Adopting a narrow competitive scope such as a “cost focus” or a “differentiation focus”.
