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Competitive Advantage in Business

   

Added on  2020-03-13

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Running head: MANAGEMENT STRATEGY 1Management StrategyStudent’s NameInstitutionDate
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MANAGEMENT STRATEGY 2Innovation and competitive Advantage Competitive advantage has been one of the primary strategies that businesses have held so high. Having a competitive advantage in the market always last for a short duration due to the dynamics that occur from time to time in the market. Competitive advantage is characterized by the ability of the business to cater for the needs and values of the customer(Johnston & Bate, 2013). Customers have changing needs and thus they are moved by organizations that provide for their emerging needs through continuous innovation. The effectiveness of the premium prices is supported by an organization that is concerned about cost efficiency, customer responsiveness, and rendering of quality goods and services. Innovation can take various forms that are not limited to product innovation and process innovation. Product innovation can take the form of adding new features to the product so that it can sufficiently meet the values and the requirements of the customers. Product innovation can lead to an extremely new product or changes to the existing product (Boons & Lüdeke-Freund, 2013). A good example for a product innovation is the case of the invention of a microprocessor by Intel in the 1970s. The product innovation made the company more competitive in the market. It is relevant to note that this change guaranteed faster, powerful and more secure operations that created sustainability in the market. Processinnovation can best be explained by the initiatives that companies engage in so as to make their operations more cost effective and interactive(Smith,2013). Process innovation creates an avenue where customers can be involved in the production of the goods through availingof processes that entertain this. A great example would the case of Nike Company. The company was aware of the impact that customer involvement had on building its competitive advantage. With this in mind, it came up with a portal where its potential customers could upload the designs that they want for their shoes, and they could customize the shoes for them. The inclusion of the customers boosted the competitive edge of the company. The
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MANAGEMENT STRATEGY 3company was able to serve a larger market because it could customize its goods to its clients. Process innovation can be in the case of a new business model for a company. Air Asia is an example of an organization that gained a competitive edge in the Air line business by incorporating of e-commerce into its operations. The encompassing of e-commerce into its operations has seen the company save a lot of its resources than any other company in the market. Nonetheless, companies such as NOKIA, MOTOROLA and Block Busters have failed in upholding continuous innovation.Porter's five forces in a food IndustryThe Porter’s five forces model appertain to five factors that verify the competitivenessof the company. To begin with, the bargaining power of the buyers is a factor that is a threat to organizations. The buyers have the disposition of purchasing the products that they require from any seller(MBA Crystal Ball, 2017) the threat lies in the ability of the buyers to access adequate information regarding the products that are in the market. The opportunity that is available for the industry is the capacity to utilize technology that will ensure that the customers are served with quality services. With the quality services, the customers will find a reason to purchase their products as compared to those of their competitors. To add on, the bargaining power of suppliers is imperative in the food industry. The potential suppliers, in this case, are the dairy suppliers, bakery suppliers, and meat vendors. To explain their bargaining power, it can be termed as low given that there are numerous providers of the fast foods. The opportunities that lie in the case of the fast food industry are the ability to get supplies for their outlets due to the limited differentiation that is in the market. Reliability of the suppliers is thus assured to the owners of the fast food industries.To add on, competitive rivalry among the competitors is a significant threat in the market. Competitors hinder a company from attaining high-profit margins in the market. The increased number of outlets is a major threat to the fast food eatery (E. Dobbs, 2014). The
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