The long development of Porter’s Five Forces Analysis has brought to the fact that those forces become the determinants of the industry’s competition. These five forces are treat of new entry, rivalry among existing firms, treat from substitute products, bargaining power of buyers, and bargaining power of suppliers. Furthermore, five forces analysis is treated by the organization to measure the level of competition, besides that, it is used as a strong first step in understanding how one industry compares to another and also to determine industry profitability because they influence the prices, costs, and required investment of firm in an industry. In order to be competitive enough, a normal company that seeks profitability would have to understand how they work in its industry and how they affect the company in its particular situation. Therefore, Three Generic Strategies were implemented to establish a strategic agenda for dealing with these five forces. Continue reading
Strategic Management Concepts
Porter’s Five Forces and Corporate Strategy
Porter’s Five Forces Framework Porter’s Five Forces Framework introduced back in 1979 by Michael E. Porter from Harvard University in his first book “Competitive Strategy”. It becomes international best seller, and considered by many to be a definitive work on corporate strategy. The book itself had been published in nineteen languages and re-printed almost sixty times, changes the way business leaders thought and remains a guide of choice for strategic managers the world over. It has become an important tool for analyzing an industry structure and strategy process. The tool provides a simple perspective for assessing the position and competitiveness of a corporation or business organization within the industry. Porter points out five forces which the upturn and downturn, will affect the profitability and existence for a corporation or business organization. The development of Porter’s Five Forces Framework is based on the idea of attractiveness of an industry. As for Continue reading
Survey Feedback as an Organizational Development Tool
The study of Survey Feedback played an important role in formation and history of Organizational Development (OD). Developed as an organization wide intervention by Mann and his associates (1957-1965), survey feedback is a process in which organizational members complete questionnaires on various organizational issues, receive feedback on the results, then take appropriate actions to address the critical needs and concerns. Though some type of survey method was prevalent in various organizations earlier, Institute for Social Research (ISR) of University of Michigan, USA developed a comprehensive questionnaire for conducting survey in different aspects of an organization. The basic objectives of survey feedback method are as follows: To assist the organization in diagnosing its problems and developing action plan for problem-solving. To assist the group members to improve the relationships through discussion of common problems. Process of Survey Feedback Survey feedback method usually proceeds with sequential activities involving data collection, feedback of Continue reading
Business Process Reengineering for Competitive Advantage
In business processes reengineering all the outdated processes of the business are redesigned along with the connected systems and entity’s structures with an aim to reach at a remarkable performance level along with business improvements. The corporate basis for creating these changes possibly will comprise deprived performance in terms of competition, financial aspects and reduction of market share of emerging market opportunities. Business process reengineering just not mean to introduction of new technology, automation, reorganization, and downsizing of business process etc but also involve change assessment various business components such as culture, entity, technology, processes and strategies. The relationship between a company and its customers is not limited to just the buying and selling of a product or service. It has gained new dimensions and expanded from the buying and selling of products and services to a whole range of business practices form customer service, consulting and pricing to production Continue reading
Concept of Industry Shakeout
Industry Shakeout marks a discontinuity or turning point, as the industry goes through a major upheaval. Some of the greatest risks which companies face are during times when the industry is witnessing a shake-out. An industry shakeout occurs when the rate of industry growth slows down as demand approaches saturation levels. A saturated market is one where there are few first-time buyers left. Most of the demand is limited to replacement demand. As an industry enters the shakeout stage, rivalry between companies becomes intense, with excess productive capacity and severe price discounting. Many firms exit the industry at this point. Industry shakeout provides an opportunity for those firms that are dedicated to success in this particular industry to consolidate their power, often by acquiring the assets of firms exiting the industry. At the growth stage of industry life cycle, a company should try to grow in pace with the growth Continue reading
Theories of Competitive Advantage
Strategy is the plan of action that allocates resources and activities and aims at dealing with the environment, achieving a competitive advantage and attaining the organisation’s goals. Competitive advantage refers to what sets the organisation apart from others and provides it with a distinctive edge for meeting customer needs in the marketplace. The choice that will make the organisation different is the essence of formulating strategy. In order to remain competitive, companies need to focus on core competencies, develop synergy and create value. Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match. A competitive advantage is said to be sustainable when it has the means to edge out rivals when competing for the favors of customers. Although sustainability is the ideal case for advantages, the most common competitive advantages are leverageable, which means that a company can use them Continue reading