We Share, We Care

☆  بِسْــــــــــــــمِ اللهِ الرَّحْمَنِ الرَّحِيْـــــمِ  ☆

Say Alhamdulillah and let's be grateful for the blessings we got in our life.

Assalamualaikum. Good evening my sweet readers. Almost 3 weeks i've been here (UiTM Lendu okay!) I am so happy studying here but there is something that could make me become a stressful person. Guess what? Hahahaa. I should not tell you. Let it be! :P

A few days ago, I have learnt a new chapter in Information Technology in Business whichis 'Identifying Comparative Advantage.' So you know right why you've been here? By hook or by crook, you have to listen for what I want to share, okay? Here we go! :D

What is competitive advantage? It is a product or service that an organization's customers place a greater value on than similar offerings from a competitors. When an organization is the first to market with a competitive advantage, it gains a first-mover advantage.The first-mover advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage. Organizations use three common tools to analyze and develop competitive advantages:

1.  the Five Forces Model
2. the three generic strategies
3.  value chains.

The Five Forces Model

The Five Force Model by Michael Porter helps determining the relative attractivenes of an industry and includes the following five forces:

• Buyer power is assessed by analyzing the ability of buyers to directly impact the price they are willing to pay for an item.

• Supplier power is assessed by the suppliers' ability to directly impact the price they are charging for supplies (including materials, labor, and services).

• Threat of substitute products or services is high when there are many alternatives to a product or service and low when there are few alternatives from which to choose.

• Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are are significant entry barriers to entering a market.

• Rivalry among existing competitors is high when competition is fierce in a market and low when competition is more complacent.

The Three Generic Strategies

Porters three generic strategies when entering a new market:

• Cost Leadership - becoming a low cost producer in the industry allows the company to lower prices to customers. 

• Differentiation - Create competitive advantage by distinguish their products on one or more features important to their customers.

• Focused Strategy - Target to a niche market, concentrates on either cost leadership or differentiation.

The Value Chain

Supply Chain which is a chain or series of processes that adds value to the product and service for customer. It is to support a profit margin for the firm. 

Okay! That's all for today. Thanks for being my ears and take care of yourself :D