Porter's Five Forces

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1.5 Competition and five forces: In order to achieve average return, Customer satisfaction is a core competency that every organization should focus. Business level strategies are used to carry out this core competency. Actions which are taken to add values to customers and gain competitive advantage in a specific market with the single product or service, are included in the business level strategy. The main concern of a business level strategy are position of a firm in the industry, firm’s competitors and Porter’s five forces. The customers of an organization are considered as the foundation or essence of business level strategies, followed in any organization. The senior management determine the following: • Who are all the customers? • What…show more content…
The able to break the operations of an organization into primary (like activities, sales and marketing and service) and support (staff activities that includes HRM & procurement) activities , lays in analyzing the value. Assessment of an organization can be done by analyzing the value chain. Assessing an organization’s perception about their competitor’s value chain, finding cost cutting ways and finding ways to add value to the customers which provides competitive advantage are done by analyzing the firm’s value chain. Will be discussed in details in section1.6. 2. Differentiation: Rather than low price, a firm’s product value is provided to the customers through its uniqueness. This is done through high quality, features and customer service, product innovation done rapidly, advancement in technological features, managing image, etc. (Rolex, Intel, Ralph Lauren is one of the companies which follow this strategy.) Value is created by: • Buyers' Costs is lowered – Lesser the breakdown higher the quality, problems are given a quick…show more content…
• Substitutes (trans. 4-26) – Substitute products are combated by the brand loyalty. Focused Low Cost: An organization compete in price as well as in a small market segment with their goods or services. For example U.S government is the only client of a company. Focused Differentiation: An organization compete in price as well as in a small market segment with their goods or services. Focused Strategies: The particular segment customers’ needs are served is known as focused strategies (e.g., federal gov't).Companies that are serving only a smaller segment with the focused strategies (e.g. business travelers) are better than their competitors who focus on wider segment of customers. For industry wide competitors, it is difficult to serve their customers when there is a special need. An organization with a capability to serve niche, can also serve a segment which was poorly previously segmented. Risks of Using Focused Strategies: • Competitors might have out focused(even smaller segment) • Broad market firms are interested in such segments. Using an Integrated Low-Cost/Differentiation

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