Quality in individual activities or functions and

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quality in individual activities or functions and over the last several years, businesses were required to be flexible to market changes, have continuous benchmarking and aggressively outsource to gain efficiencies in the competitive environment. Although organizations can gain great advantage and benefits from operational approach, however, from a competitive standpoint, the problem is that the competitors easily imitate best practices. When competitors in an industry adopt practices, the productivity frontier (the max value can business can deliver at a given cost) shifts outward, lowering costs and improving value at the same time and produces operational effectives but no relative improvement for the organizations. All in all, I believe that enterprises should practice operational agenda in the routine day to day practices that needs fine details, however, since strategic agenda covers a broad scope of organizational activities companies need to take into account a solid strategic plan to meet the business broad based objectives. 6) Describe the 5 competitive forces . This model was devised by Michael Porter to describe forces that shape competition within an industry and help to identify strategic opportunities and threats. The stronger each of these forces
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is, the more established companies are limited in their ability to raise prices and earn greater profits. A strong competitive force is a threat because it depresses profits. A weak competitive force is an opportunity because it allows the company to earn greater returns. The five competitive forces shaping strategy are: (1) Rivals, (2) Customers, (3) Suppliers, (4) Potential New Entrants and (5) Substitute Products and differs by industry. The strongest competitive forces determine profitability and then becomes the most important in strategy formulation. Overall, if forces are strong (airlines), there will be small ROI. Conversely, if forces are nonthreatening (software, soft drinks, toiletries), many companies are profitable. According to the course PowerPoint, understanding the competitive forces and their underlying causes reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition and profitability over time. 1. When there is rival among existing competitors, there is price discounting, new product introductions and advertising campaigns. High rivalries limit the profitability depending on the intensity of the rivalry. When rivals are equal in size, there is equal potential and when industry growth is slow, there are fights for market share. Additionally, when rivalry is existent, exit barriers are high and there is high commitment (strong personalities, egos, etc.). When rivals compete, the products are essentially the same, fixed costs are high and martingale costs are low, the capacity will have to be expanded in large increments and products are perishable. According to Porter, in order to sustain long-term profitability, one must respond strategically to competition. To control price
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  • Spring '15
  • Dr.RavenDavenport

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