K201 LECTURE STUDY GUIDE

K201 LECTURE STUDY GUIDE - K201 LECTURE STUDY GUIDE 8...

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Unformatted text preview: K201 LECTURE STUDY GUIDE 8 Competitive Advantage (10/23) Lecture 8 slides Chapter 2; pp. 17-25 o Competitive Advantage- Product or service that an organizations customers place a greater value on than similar offerings from a competitor. o Typically temporary o Organizations must develop strategies based on new c.a. o First Mover Advantage- occurs when an organization can significantly impact its market share by being first to market with a competitive advantage o Example. FedEx Used first mover advantage when they created a customer self service software that is now standard on the internet for all parcel delivery services. o Environmental Scanning- the acquisition and analysis of events and trends in the environment external to an organization. o I T (Information Technology) has an opportunity to play an important role in environmental scanning. Example: Frito Lay o They not only research their own products on location they also research the offerings , inventory and locations where its competitors are sold too. o Organizations use 3 common tools to analyze and develop competitive advantage o The Five Forces Model(Michael Porter) Helps to determine the relative attractiveness of an industry and includes: o Buyer Power o Is high when buyers have many choices of whom to buy from and low when their choices are few. o To reduce buyer power ( create competitive advantage ) an organization must make it more attractive for customers to buy from them than their competitors. o Supplier organizations will want buyer power to be low. o Loyalty Programs- reward customers based on the amount of business they do with a particular organization Good example of IT based program used to help with competitive advantage (lowering buyer power) Travel industry is famous for its loyalty programs o Supplier Power o Is high when buyers have few choices of whom to buy from and low when their choices are many. o Is the converse of BUYER POWER. o Supply Chain- consists of all parties involved directly or indirectly, the procurement of a product raw material. In typical supply chain organization will be both a supplier to customer and a customer of supplier organizations o Can increase competitive advantage by locating alternative supply sources. IT with B2B (Business To Business) Marketplace Internet based service that brings together buyers and sellers. Private Exchange- B2B marketplace which a single buyer posts its needs and then opens the bidding to any supplier. Bidding is usually through a : Reverse Auction- increasingly lower bids are solicited from organizations willing to supply desired product or service o Threat of Substitute Products or Services o Is high when there are many any alternatives and is low when there are few alternatives to choose from o Can create competitive advantage with switcvhing costs o Switching Costs- costs that make a costumer reluctant to switch to another product or service Doesnt need to have an associated monetary cost...
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This note was uploaded on 03/02/2011 for the course BUS-K 201 taught by Professor Sarahsherry during the Spring '08 term at Indiana.

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K201 LECTURE STUDY GUIDE - K201 LECTURE STUDY GUIDE 8...

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