Independent Study --- Competitive Strategy written by Michael Porter
Chapter 1
Competitive Strategy is to develop a top level tactical plan by accessing existing and possible actions to be taken by competitors through benchmark itself verse other competitors in terms of cost, differentiation and the focus from its products & services on all functional perspectives. The author believes that understanding industry structure is an essential starting point. Chapter 1 gives the generic idea of structure analysis through understanding the five fundamental forces. These five forces are composed of suppliers, buyers, substitutes, potential entrants and industry competitors. A good structure analysis will allow company itself to create a defendable position by SWOT analysis. Six major factors raise barriers to entry for the potential competitors. They are: scale economics, intangible assets, product differentiation, capital requirement, switching costs and government policy. The company in high entry barriers but low exit barriers will generate high and stable returns
No comments:
Post a Comment