CHAPTER 2

 

Identifying Competitive Advantages

• A competitive advantage is a feature of a doctor or service on which customers place a greater value than they do on similar offering from competitors.
• competitive advantages provide the same product or services either at lower price or with addition value that can fetch premium prices.

THE FIVE FORCES MODEL- EVALUATING INDUSTRY ATTRACTIVENESS

1.  Knowledgeable customers can force down prices by pitting rivals againts each other.
2. influential suppliers can drive down profits by charging higher prices for supplies.
3. competition can steal customers.
4. new market entrants can steal potential investment capital.
5. substitute products can steal customers.

BUYER POWER

• Buyer power is the ability of buyers to affect the price they must pay for an item.
• factors used to asses buyer power include number of customers, their sensitivity to price siza of orders, differences between competitors , and availability of subtitute products

SUPPLIER POWER

• Is suppliers ability to influence the prices they charge for supplies ( including materials, labor, and services).
• if supplier power is high, the supplier can influence the industry by :

1. Charging higher prices.
2. limiting quality or services.
3. shifting costs to industry participants.

THEREAT OF SUBTITUTE PRODUCTS OR SERVICES

• The threat of subtitute products or services is high when there are many alternatives to a product of services and low when there are few alternatives from which to choose.

THEREAT 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 joining a market.

RIVALRY AMONG EXISTING COMPETITOR

• is high when competition is fierce in a market and low when competitors are more complacent.

THE THREE GENERIC STRATEGIES- CHOOSING A BUSINESS FOCUS

                  

THE GENERIC STRATEGIES

VALUE CHAIN ANALYSIS - EXECUTING BUSINESS STRATEGIES

THE VALUE CHAIN