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CHAPTER 2 - Coggle Diagram
CHAPTER 2
Porter’s three generic strategies - Creating a Business Focus
Broad differentiation: Focused strategies target a niche market
Focus strategy Concentrate on either cost leadership or differentiation
Broad cost leadership: Broad strategies reach a large market segment
Identifying Competitive Advantages
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
Value chains - Targeting Business Processes
Support value activities - support the primary value activities
Primary value activities - acquire raw materials and manufacture, deliver, market, sell and provide after-sales services
Three common tools used in industry to analyze and develop competitive advantages
Porter’s Five Forces Model - Evaluating Business Segments
Buyer power - high when buyers have many choices of whom to buy from and low when their choices are few
supplier power - high when buyers have few choices of whom to buy from and low when their choices are many
Threat of new entrants - high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market
Threat of substitute product or service - high when there are many alternatives to a product or service and low when there are few alternatives from which to choose
Rivalry among existing competitors - high when competition is fierce in a market and low when competition is more complacent