ISOM Lecture 1

ISOM Lecture 1 - To survive and thrive an organization must...

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•To survive and thrive an organization must create a competitive advantage Competitive advantage – a product or service that an organization’s customers value more highly 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 • Not always an advantage –e.g. Microsoft; Microsoft vs. Netscape Organizations use Porter’s FIVE FORCES MODEL to determine the relative attractiveness of an industry Buyer (customer) power – high when buyers have many choices of whom to buy from and low when their choices are few Loyalty programs – reward customers based on the amount of business they do with a particular organization •E.g. frequent flyer miles programs –Question: Do loyalty programs reduce or increase customer power? Answer: Reduce, you trade your customer power for something else. Supplier power
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ISOM Lecture 1 - To survive and thrive an organization must...

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