Porter Argues That If a Firm Is to Attain Competitive Advantage

Porter argues that if a firm is to attain competitive advantage; it must choose between the types of competitive advantage it seeks, discuss using an industrial example? An industry can be defined as a group of companies offering products that are closely substituting for each other in order to satisfy customers. Competitive advantage can be defined as when a firm sustains profit which exceeds the company’s average; it automatically possesses competitive advantage over rivals. The business strategy for most companies is to achieve a sustainable competitive advantage.This essay aims to discuss why firms must choose between types of competitive advantages using an industrial example. Michael Porter indentified that there are 2 basic types of competitive advantage, cost advantage and differentiation advantage. A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower price (Cost Advantage) or deliver benefits that exceed those of the competitors (Differentiation). Thus, the firm creates superior value and products for customers whilst it gains superior profit for the company.A resource based view emphasizes that a firm utilizes its resources and capabilities to create a competitive advantage that results in creating superior value thus the firm must have resources and capabilities that are superior to those of the competitors. Resources are the firm specific assets used for creating either a cost advantage or differentiation advantage, examples of resources are brand equity, reputation, installed customer base. While, capabilities refer to the firm’s ability of utilizing its resources, an example is the ability to bring out a product or market before competitors.Thus, the resources and capabilities together result in distinctive competencies which allow innovation, efficiency, creativity, quality and customer responsiveness which can be leveraged to create cost advantage or differentiation. Essent ially, a firm’s relative position within its industry determines whether its profitability stands above or below industry average. Porter states that there are 2 types of competitive advantage a firm can possess as mentioned above however , there are 3 generic strategies for achieving competitive advantage in an industry; cost advantage/leadership, differentiation and focus.The first type of competitive advantage is cost advantage /leadership, it is when a firm becomes low cost producer in its industry. It minimizes the cost to the organization of delivering products and services. According to Porter (1985) , there are two ways of achieving cost leadership either by increasing profit by reducing costs while charging the average price. Or by increasing market share through charging lower prices while still achieving a reasonable profit on each sale because your cost has been reduced.Furthermore, companies that are successful in achieving cost leadership usually have an access to the capital needed to invest in technology which helps reduce the cost. Also, they have very efficient logistics and a low cost base such as labor, materials and facilities (Ibid, 1985). Essentially, if a firm can achieve and maintain cost leadership, it can obtain above average performance whilst the prices are still affordable in that industry. Hence, the cost leader does not try to be the industry innovator, it seeks to position its products to appeal to the average customer taste.The aimed goal is to increase efficiency and lower its costs in relation to competitors. Some of the advantages of the cost leadership strategies are it is protected by industry competitors by cost advantage, purchases in large quantities which increases bargaining power over supplier. Also, it has the ability to reduce price to compete with substitute products, less affected by a fall in the price of inputs as it has powerful buyers. Some of the disadvantages are competitors may lower their cost str ucture, they may imitate the cost leaders method and cost reductions may affect demand.Furthermore, Porter argues that a low cost position acts to a firm’s benefit against rivalry, and it can act as a defense against powerful suppliers by providing more flexibility to cope with input increases. The car industry has always been one of the most competitive industries because of the huge revenues and profits available at stake. The competition has increased drastically in this industry as there has been a constant need to continuously develop new kinds of car models to satisfy the needs of particular groups of buyers.For example, Toyota has used its low cost structure to produce efficient and increasing ranges of vehicles tailored to different segments of the car industry. Its ability to move from the design to production stage in two to three years gives it the benefit of bringing out new models faster than its competitors and capitalize on the development of new market segment s or niches. Also, Toyota has been a leader in positioning its range of vehicles to take advantage of emerging market segments.For example , in the sports utility segment, it offers six models of sports utility vehicles each offering a combination of price, size, performance, styling and luxury that appeals to different sets of buyers. The second type of competitive advantage addressed by Porter is differentiation. As opposed to cost leadership approach, differentiation does not seek to lower prices in order to gain competitive advantage. Porter states that by using differentiation approach, a firm seeks to be unique in its industry alongside some attributes that are greatly valued by buyers.An industry selects few attributes that most buyers in an industry perceive as vital and aims to uniquely present and position itself to meet those needs. Differentiation approach is usually rewarded for its uniqueness with a premium price and to make a successful generic strategy, organizations need to have good research, development and innovation. They need to have the ability to deliver high quality products and services and have an effective sales and marketing team in order to understand the market demands.Usually, companies that follow differentiation strategies create a product that is distinct for its competitors in an important way. Therefore, a differentiator strives to differentiate itself in as many dimensions as it can, it seeks to segment the market in many niches , and it focuses on the organizational functions that provide a source of distinct advantages. According to Porter, there are several sources of product differentiation that a firm must look at.Firstly, firms should focus on the product and highlight which features they want to change, how complex they want the product to be, when they would like to introduce the product and the location. Secondly, firms should focus on their relationship with the customer, product customization, and consumer marke ting and product reputation. Lastly, firms should focus on linkages within and between firms, linkages among functions within a firm, linkages with other firms, product mix , distribution channel and service and support. Some of the advantages of differentiation strategy are customers develop brand loyalty.Also, differentiators could pass price increases onto customers, powerful buyers are not a problem because the product is distinct and differentiation and brand loyalty are barriers to entry. Some of the disadvantages of differentiation strategies are difficulties maintaining long term distinctiveness in consumer’s eyes, competitors can quickly imitate and difficulty maintaining premium price. For example, American Express carefully differentiated its product using famous people to advertise the virtues, exclusivity, and distinctness of possessing those cards.Amex cards were premium products that allowed the company to charge both customers and merchants more because it off ered quality service and conferred status on the user. By 2002, it offered 9 kinds of charge cards and 14 kinds of credit cards seeking to expand the market reach. The third strategy Porter mentions is the focus strategy which concentrates on particular niche markets and tries to understand the dynamics of that particular market. Alongside, the unique needs of customers in those markets, it seeks to develop low cost and well specified products for the market.Usually, it results in strong brand loyalty amongst customers which makes their market segment less attractive to competitors. Focus strategy usually combines with either cost leadership or differentiation as it is not enough on its own. In addition, the focuser strives to serve the need of a targeted niche market segment where it has either a low cost or differentiated competitive advantage. In cost focus, a firm seeks cost advantage as its target segment. In differentiation focus, firms choose differentiation as their main app roach.Some of the advantages of focus strategy is the focuser is protected from rivals by providing a product or service that they cannot offer, the focuser has power over buyers because they cannot get the same service from anywhere else. Also, the threat of new entrants is limited by customer loyalty to the brand and customer loyalty lessens the threat from substitutes. Some of the disadvantages of focus strategies are differentiators will compete for a focuser’s niche and the focuser’s niche may disappear because of technological change or changes in customer’s tastes.

Politics. Who Has The Right To Rule Essay Example | Topics and Well Written Essays - 1250 words

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Othello Essay Example | Topics and Well Written Essays - 750 words - 5

Othello - Essay Example The heart of Othello is opened for Desdemona, but his mind remains closed. We can see that love is different with different characters of the play. The main hero Othello understands that trust is very important thing in marriage and it can’t be built in one day. However, his foes acted too rapidly and did not give him a time to build trust. The deep feeling of Othello and Desdemona appeared instantly and was built mostly on passion, but Desdemona managed to turn it into strong attachment not realized by Othello: "It cannot be true that she really loves me†¦if she loves me, then there must be something wrong with her" (Shakespeare). Desdemona succeeded to protect her marriage in the face of her family. She protected her choice before Brabantio and Gratiano, praising her husband’s best qualities. Othello was clever and purposeful. He proved to be a successful leader and commanded deep respect his people. Within the play, Desdemona’s character transforms gradua lly. Having married Othello, Desdemona acted against her father’s will and in the teeth of the Renaissance public opinion. She is â€Å"a woman who combines spiritual and physical love for Othello and who is courageous and independent in her judgments, often stubbornly so† (Hall, 1999: 67). Firstly, she had fully relied on her father, but in her married life, she had to submit to her husband. On Cyprus, she supported him in career making and dealt with household with pleasure. Othello really loved his wife, their marriage was concluded due to deep love and passion. However, this passion was too strong and he could not control its power. It captured him so deeply that he did not want to see the truth. Jealousy is the power that appeared to kill Othello. It was Iago who helped this destructive feeling occupy the soul of the mail hero of the play. Stupid Iago thought that he knows everything about jealousy but he did not take into

Depends on Paper Chosen Research Example | Topics and Well Written Essays - 750 words

Depends on Chosen - Research Paper Example These norms for conduct have been advanced by regulation of research to address any sort of concerns highlighted in research of conformity and responsibility.   â€Å"Research ethics is a kind of applied or practical ethics, meaning that it attempts to resolve not merely general issue but also specific problems that arise in the conduct of research.   Its goal is to determine the moral acceptability or appropriateness of specific conduct and to establish the actions that moral agents ought to take in particular situations† (Penslar, 1995, p. 13). Researchers in every field are therefore bound by many ethical norms and obligations that can pose as challenges through the research phase. There are several reasons as to why it is crucial to adhere to ethical norms in a research. The â€Å"code of conduct† or the norms in research should be followed to promote the aims of research – knowledge, truth and eluding misrepresentation of data error. Most importantly, re searchers should follow strict conduct of ethical norms to ensure moral and social values, such as social responsibility, and to ensure accountability to the public. The main ethical challenge a researcher encounters in a survey research is the data collection. Many a times the data collected are not done professionally or sometimes they are fabricated. Some researcher also made up their own data due to time constraints and other factors. Research ethicists everywhere today are challenged by the issue of limited resources in any field. This often led to fabrication of data and misrepresentation of the given data. Embellishment  of data  and fabrication of data are the two things that I need to avoid to uphold my ethical values in my research .It would be an immense challenge for me to maintain ethics in research with the limited resource material available. This is a serious breach of ethics in research and should not be practiced. For any researcher to be relevant, it is necess ary to be free from personal bias and objectivity. Objectivity can be considered as one of the most cherished ideals of the educational research community. A very crucial role of a researcher is to unearth the facts without tainting it or influencing it in any way.   We, as humans, often tend to be biased, especially on things that are close to our heart and which matter to us. This often blinds our judgment and makes us err in many decisions. A researcher should be free from personal bias or fabricating data. If a researcher separates his daily life from his professional role, he can be free of bias.   Another factor to keep in mind while doing a survey research is that the research questions should be clear and should not be manipulated. The interviewee should  Ã‚   be able to understand the questions given to him/ her for the survey to be successful. Many a times a survey researcher manipulated the questions as to get the desired answers from the correspondent. This should not be practiced as it violates the ethics of research. In any research the confidentiality of the participants should be of high priority. It is very crucial to have a clear understanding with the participants. They should be clearly addressed on the research being conducted and it should also be mentioned that their names will be strictly confidential if

Process Control and Improvement Assignment Example | Topics and Well Written Essays - 2500 words

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The events industry Essay Example | Topics and Well Written Essays - 1500 words

The events industry - Essay Example For instance, in the current world, the amount for raising and sponsoring events is quite higher compared to the way it was several decades ago. As such, it is important to note that the event industry has been undergoing a dramatic change relevant to several issues touching on demands and interests of the organizers and the intended participants. For instance, in the past days, the costs for conducting such events involving local sports were relatively low (Smith, 2009, 53). This involved people coming, watching games and moving back to their residences. However, currently the costs of such local events have increased tremendously. The local events nowadays employ the use of public address systems as well as media involvements. These contribute towards raising the costs of such events. Events may always originate from different sources involving festivals, public events as well as cultures and traditions (Fenich, 2012, 36). However, it is important to note that events differ in their characteristics. Some events are labor intensive whereas others are perishable. Fixed time scales, uniqueness as well as personal interactions always characterize events. However, it is important to acknowledge the fact that the event industry has been critical in ensuring economic development and growth, societal development as well as conservation of cultures (Baum, 2009, 51). There are several categories and typologies of events. Events can be categorized into six main categories. These include the individual events, group events, organizational as well as multi-organizational events. In addition, other categories may include national events as well as international events. Several typologies of events exist relevant to the different categories. Individual events may comprise of weddings, birthday parties as well as private dinners (Goldblatt, 2011, 53). Group events may involve festivals as well as local

Power in Organizations Assignment Example | Topics and Well Written Essays - 750 words

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