Strategic Tools for Competitive Advantage in Management

Management
Competitive Advantage
Students name
8/13/2019

Competitive advantage 1
Strategy development tool mainly highlights about the various strategies techniques, which
mainly helps in facilitating, researching, analyzing and mapping the organizational competencies
or the abilities to achieve the future objectives (Berisha, et al, 2017). These processes mainly
highlight about the organizational processes, technologies, business development and the people
capabilities. Hence, this entire process fills the gap in between the strategic, tactical and
operational aspects of the organization (Ansoff, et al, 2018).
Five force model of Amazon-
Porter’s five-force model is an analytical framework, which mainly represents the five aspects
that helps the organization in shaping the overall competition of the industry.
Firstly, threat of the new entrant highlights about the industry entry barriers which portraits about
the potential new market entrant, on the bases of their competitive advantage, innovative
features, capabilities in features and service offerings majorly affects the industry entry barrier
and the absence of switching cost for the customers also increase the threat of the new entrant.
Amazon has a major threat of new entrant as with time the online shopping in much more trendy
(Jussani, et al, 2015).
Secondly, bargaining power of the buyers mainly highlights about the customers power as they
can anytime switch to the substitute products and services and such abilities of the buyer
generate the highly intense competition in the marketplace. Similarly, in Amazon case, certain
electronic devices such as fire tablets, fire TV having a higher substantial bargaining power due
to the high competition level among companies.
Bargaining power of the suppliers mainly highlights about the diversity of the business and the
companies diversity of the business and the companies exercising power within the marketplace.
In amazon context, the bargaining power of the amazon suppliers are low because the number of
suppliers are more, they need to follow the code of conduct and should generate the fair and the
ethical treatment. Hence, in this the suppliers’ forward integration is difficult. Therefore, this
proves that amazon can easily switch to the other suppliers as they have several options to
choose (Jussani, et al, 2015).
Threat of substitutes in terms of amazon is very high as there are numerous other brands which
also deals in the inline retail business, other than this, general people also buy various of

Competitive advantage 2
products from the physical stores or the retailers. The only major competitive advantage of
Amazon Company is very strong as they provide the excellent customers services apart from the
quality or the brand name. In this threat of substitute is high because the customers can mainly
switch from brand to other.
Lastly, rivalry among the industry mainly highlights about the number of other players, which
generates high competition among the companies. Rivalry is intensified in the retail industry by
many factors such as market share and creating competitive pressure. In term of amazon, Costco
and Wal-Mart the biggest rivalry companies which provide same services and product as
amazon. Hence, it is seen that in near future, the level of competition will keep on continuing for
amazon (Jussani, et al, 2015).
Ansoff Matrix
Another strategy development tool, highlights about the ansoff matrix mainly target the four
major aspects such as market penetration, product development, market development and lastly it
talk about the diversification aspect so that knowing about them, company can easily make the
strategic decisions (Bock, et al, 2016).
Market penetration is a strategy, which mainly highlights about the existing products in an
existing market. As such, the tesla company mainly applies strategy because they mainly focus
on selling their various models in their own country as well as other 29 countries too. Their
products lists mainly comprises of solar panels, racking, electric hardware and other monitoring
devices and much more.
Product development is another strategy, which highlight within ansoff matrix, which mainly
talks about development of new products, which would be sold in existing market. In this case,
tesla is less engrossed in this activity which highlights that tesla frequently make the new
products. This is all because of higher cost, which is charged in electric vehicles and power
storage sectors.
Market development is also one of the strategies of the ansoff matrix, which mainly highlights
about finding new market for the existing products. As, tesla is thinking of making a new market
entry in which they are targeting India on first number in which they are making various
strategies and accordingly the various appropriate decisions which will further benefit the