innovation produced through employees tacit knowledge and experience that is

Innovation produced through employees tacit knowledge

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innovation produced through employees’ tacit knowledge and experience, that is difficult for competitors to pin and imitate. Non- Substitutability Threat of substitutes in the technology industry is high, Google has valuable and inimitable qualities, and the online world is quickly developing, with many different ways of accessing information, Google search is debatably most efficient. Google excels when it comes to providing relevant search results and quickly, giving it a competitive advantage for now, but innovation is consistently required to maintain and, create more for value for customers and to sustain competitive advantage.
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Harleen Sodhi | 22011288 MNG00114 The use of the RBV determines that sustained competitive advantage is achieved through innovation using distinct capabilities that Google possesses; the utilisation of distinctive resources and capabilities by Google has lead to this sustained advantage, as the resources are inimitable, valuable, rare and hard to substitute. PEPSICO Porter’s Five Forces framework is used to “…identify the attractiveness of an industry in terms of five competitive forces...new entrants, substitutes, supplier power, buyer power and competitive rivalry.” (Johnson et al. 2015, p.28) , the framework is also used as a useful starting point for strategic analysis, as it aids in setting an agenda for action on critical issues identified by the framework (Johnson et al. 2015, p.28). Competitive Rivalry Moderate. There is risk of diversification from a direct competitor such as Coca Cola, a firm that is of roughly equal size. However, PepsiCo and Coca Cola are in a duopoly, which means that smaller players are reluctant to challenge the two organisations; high fixed costs and entry barriers also reduce competitive rivalry New Entrants Low. Beverage and snack industry is fairly saturated, and high investment requirements are needed to successfully enter the market, as well as, a small number of multinationals dominating the market share, creating retaliation risks such as, price wars. Buyer Power High. Many substitutes available, with low cost of switching leading to a higher degree of price sensitivity, giving leverage to buyers over firms Supplier Power Low. Less concentrated supplier, as there is a large number of them and switching costs are relatively moderate, with the cost of losing a client like PepsiCo being a greater financial risk for the supplier than it would be for PepsiCo Substitutes High. Numerous alternatives of drinks available that are targeting the same market, in not only the beverage industry but also in the savoury snack industry The five forces are moderate, which for smaller firms would make the industry less attractive; however, PepsiCo is already well established with a high degree of brand loyalty, making the industry very attractive. Coca cola i s one of PepsiCo’s fiercest competitors in the beverage industry which was threatening PepsiCo’ s profitability; PepsiCo’s strategic use of a mergers
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