PAST YEAR SEMESTER #5

April  2009

Part A

3. A competitive advantage is typically temporary, unless it is first mover advantage

= FALSE

4.An entry barrier is typically used to influence the rivalry among existing competitors

= FALSE

Part B

3. What is competitive advantage ?

 B.   A product or services that an organization's customers value more highly than similar offerings from a supplier.

4. All of the following are common tools used in industry to analyze and develop competitive    advantages, excepts  :

C. competitive analysis model

Part C

QUESTION 1

(a) There is 5 components in the five(5) force in Porter’s five forces model is buyer power,
     supplier  power , threat of new entrants, threat of substitute products or services and rivalry
      among existing competitors.

Buyer power is high when buyer can choose many choices of whom to buy from and low when the choices are few. An organization  must make it more attractive for customers to buy from it than from its competition. It also can grow large and powerful as a result of new market share.

Supplier power is high depend on the supplier when have limited supplier power with limited resources. It is high when buyers  have few choices of whom to buy from and low when their choices are many. It is the converse of buyers power. Many firm seek to reduce their dependence on a sign firm to limit the suppliers bargaining power. It is consist of private exchange where a buyer posts it needs and then opens the bidding to any supplier whoe would care to bid.

Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market.  Entry barrier is a product or services feature that customer have come to expect from organization in a particular industry and must be offered by an entering organization to compete and survive. For example , bank offers services such as ATM.

Threat of substitute products or services is high when there are many alternatives to a product or services and low when there are few alternatives from which to choose. The organization can create competitive advantage by using switching cost. Switching cost are cost that can make customers reluctant to switch to another products or services.

The last one is the rivalry among existing competitors is high when competition in fierce in a market and low when competitors is more complacement. The existing competitors are not much of the threat typically each from has found its niche.