Examples of Five Generic Competitive Strategies

Michael Porter Five Generic Competitive Strategies

Assalamualaikum w.b.t.

The five generic competitive strategies include:

1)      Low-Cost Provider

2)      Broad Differentiation

3)      Focused Low-Cost

4)      Focused Differentiation

5)      Best-Cost Provider

According Michael Porter, strategies allow organization to gain competitive advantage from three different bases which are:

1)      Cost leadership

2)      Differentiation

3)      Focus

Porter calls these bases as “generic strategies”. Firstly, cost leadership refers to producing standardized products at a very low per-unit cost for consumers who are price-sensitive. There are two alternative types of cost leadership which are low-cost strategy and best-value strategy. Low-cost strategy offers products or services to a wide range of customers at a lowest price available on the market. Meanwhile, best-value strategy offers products or services to a wide range of customers at the best price-value available on the market. Both two types of strategies target a large market.

Secondly, Porter’s generic strategy is differentiation. It is a strategy aimed at producing products and services considered unique industry wide and directed at consumers who are relatively price-insensitive. A successful differentiation strategy allows a firm to charge a higher price for its product and to gain customer loyalty because consumers may become strongly attached to the differentiation features. Special features that differentiate one’s product can include superior service, spare parts availability, product performance, useful life, ease of use and etc. the most effective differentiation bases are those that are hard or expensive for rivals to duplicate.

Lastly, Porter’s generic strategy is focus. Focus means producing products and services that fulfill the needs of small group consumers. Two alternative types of focus strategies are focused low-cost and focus differentiation. Low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market. Meanwhile, focused differentiation offers products or services to a small range of customers at the best price-value available on the market. It is sometimes called “best-value focus”. The aim is to offer a niche group of customers’ products or services that meet their taste and requirements better than rivals’ product do. Both two types focus strategies target a small market.

Ashura Day @ 10 Muharram

In the name of Allah, we praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to falling astray, none can guide them aright. We bear witness that there is no one worthy of worship but Allah alone, and e bear witness that Muhammad is His messengers.

Assalamualaikum w.b.t to all Muslims ^^

How are you today? I hope all of us in the protection of Allah. Insha Allah. Today, I would like to share about “Ashura Day”. As a Muslim, we already know what is “Ashura Day” right? Ashura day is the 10^th day or Muharram (the first month of the Islamic calendar). Since the beginning of this world, Ashura day has been a very important day. On this day, Prophets, Saints and Sincere servants of Allah were blessed with miracles and spiritual powers. Therefore, what I can say here is 10 Muharram is a great day! ^^ 

The stories behind the day of Ashura are:

1   1)      Repentance of Prophet Adam A.S was accepted by Allah.

2   2)      The ship of Prophet Nuh A.S came to rest on a mountain called Al-Judi.

3   3)      Prophet Ibrahim A.S was born on this day and he got the title Khalilullah (friend of Allah) on this day.

4   4)      The fire in which Prophet Ibrahim A.S was thrown by the king Namrud become cool and means of safety for Prophet Ibrahim, by the order of Allah.

5   5)      Allah delivered Prophet Ayub A.S from distress and he was restored to prosperity.

6   6)      By the grace of Allah, Prophet Yunus A.S was casted out on the shore after being swallowed by a huge fish (whale) for forty days.

Actually, there are many stories but, I just listed some examples of the story behind the Ashura day. Sorry. Now, I would like to talk about fasting on 10 Muharram. 

Fasting on Ashura day carries a great reward. It is better to fast both 9^th and 10^th of Muharram or 10^th and 11^th Muharram to distinguish Muslims and Jewish because they also practice the same thing.

“Berpuasalah kamu di Hari Ashura dan kamu bezakanlah dengan (amalan) orang-orang Yahudi. Oleh itu, berpuasalah sehari sebelumnya dan sehari selepasnya. “

-Hadith Ahmad-

In short, it would be “afdhal” to fasting all three days which are 9^th, 10^th and 11^th Muharram. If not able, fast on 9^th and 10^th. If not able too, it is sufficient to fasting on 10^th Muharram. It is due the fact that, our beloved Prophet Muhammad S.A.W has said that this is the most rewarding fast next to Ramadhan. Our beloved Prophet has also said that fasting on Ashura day will compensate for one year’s sin.

So, I think that’s all about from me. I hope with a little sharing can be beneficial to us in this world and the hereafter. I’m sorry if I’m wrong in transmitting knowledge. If I’m wrong, please let me know. Thank you very much.

“Whatever written of truth and benefit is only due to Allah’s assistance and guidance, and whatever of error is of me. Allah alone knows best, and he is the only source of strength. May Allah guide us to the straight path of Islam. May Allah guide us to the Siraat al-Mustaqeem.”

WEEK 4 - Evaluating a company's resources, capabilities, and competitiveness.

Hi everybody! ^^ How are you today? Today, I would like share about what I’ve learned in chapter 4. Ok! Now, I want to ask you. What resources and capabilities are? Take 5-10 minutes to thinks and answer my question. So now, let’s compare your answer and my explanation about the two key words that I’ve mentioned earlier. 

Alright, now you know what my answer is. Then, compare with your answer. Is it same with me? Or your answer is more clearly and more suitable than me? Or your answers are differing from me? If I make a mistake, please let me know ok! Thank you. (^_^) Therefore, a firm’s resources and capabilities represent its competitive assets and are big determinants of its competitiveness and ability
to succeed in the marketplace. Resource and capability analysis is a powerful tool for sizing up a company’s competitive assets and determining if they can support a sustainable competitive advantage over market rivals.

Next, we move on VRIN test. What is VRIN? VRIN test is for sustainable competitive advantage which means sustain for a long-term. VRIN test ask if resources:

To identifying the firm’s resources and capabilities by VRIN testing, the firm should ask:

●     Is the resource (or capability) competitively Valuable?

●     Is the resource Rare—is it something rivals lack?

●     Is the resource hard to copy (Inimitable)?

●     Is the resource invulnerable to the threat of substitution from different types of resources and capabilities (Non-substitutable)?

Then, we move on SWOT analysis. Do you know what SWOT analysis is? I believe that many of us know what SWOT analysis is. While many can quickly understand what SWOT stands for? Basically, S represent as strength, W as weaknesses, O as opportunities, and T as threats. SWOT analysis is a powerful tool for sizing up a firm. Many too forget the need for matching external with internal factors to generate appropriate strategies.

Opportunities + Threats = External

Strengths + Weaknesses = Internal

                                               

I think I should not explain more about SWOT analysis because many of us can easily and quickly understand what SWOT analysis is. Hence, in business, internal and external should match together. By matching these two sets of factors, a rational strategic decision can be derived.

Lastly, I want to explain a little bit about the concept of a company value chain. A company’s value chain identifies the primary activities and related support activities that create customer value. The simple example of value chain process as following:

In short, value chain analysis facilitates a comparison, activity-by-activity; of how effectively and efficiently a firm delivers value to its customers, and relative to its competitors. Moreover, segregate the firm’s operations into different types of primary and secondary activities to identify the major components of its internal cost structure. So, I think that’s all for today. I’ve no idea to explain more because I’m not totally 100% understand about this concept. Sorry. (~_~) Please forgive me for the mistake that I’ve done and for the wrong information that I’ve shared with you. Thank you. See you later! ^^

( Evaluating a Company's External Environment )

Assalamualaikum..

Hi everyone! Today, I want to share about what I’ve learned in my class last two weeks. Hehe. Sorry because I’m late update my blog. (^_*) Actually, I’ve no idea to update my blog before this. Now, I think I can share a little bit about chapter 3 (Evaluating a Company’s External Environment). Sorry if I make a mistake especially grammatical error. J Alright! Let’s start! Ok, first question is what is macro-environment? Generally, macro-environment also known as general environment includes all the environmental factors that have an impact on all organizations and firms within the economy. It is represents factors that will influence directly or indirectly. A simple acronym to remember the factors is PESTEL.

The examples of each factor as below:

The macro-environment or PESTEL analysis, however, is not to enough to identify meaningful opportunities and threats to a firm. A group of firms that produce similar products or sell the same product to the same markets is defined as an industry. The industry environment includes the key forces shaping and influencing competition in that industry. These forces are known as Michael Porter’s Five Forces Model (1980) and described as below:

Now, I will explain one buy one for the five competitive forces. Firstly, threats of new entrants. A new entrant to an industry can raise the level of competition. An industry’s barrier-to-entry can limit the number of new entrants into the industry. Barrier-to-entry refers to factors that can obstruct or limit the threat of new entrants. The following have identified as barrier-to-entry for new firms into an industry:

Secondly, the bargaining power of suppliers. Suppliers are the source for an organization to obtain the inputs such as labors, parts and raw materials needed to produce its goods and services. For instance, a supplier group is powerful when the suppliers’ goods are critical to the buyers’ marketplace success. Next is bargaining power of buyers. Customers are the potential buyers of the products that are supplied by the firm in the industry. Customers also have the most power when they are large and purchase most of the industry’s input. Fourthly, substitute products. Generally, product substitute present a strong threat to affirm when the customers can obtain a product which is almost of the same quality or the same functions as a product the industry produces and at a lower price. The substitute products can be a treat when the product is undifferentiated. Last but not list, rivalry among competitors. Rivalry among competitors can be most intense when there are numerous competitors in the industry. Other than that, the rivalry among competitors can be strong and powerful when there are high fixed costs of production.

Ok! I think I should stop here. It is because I have no idea anymore to share more about this topic. I’m really sorry for the weaknesses. I hope what I have explained before can help you a little bit. Alright! I stop here. Arigato! Haik! Hehe (^_*) See you soon! ^^

# The Business Vision and Mission #

Hi everyone! Today I would like give a short brief about the business vision and mission. Do you know what vision is? Mission? Ok! Let’s me tell you. Generally, vision refers to the basic question which is “What do we want to become?” Meanwhile, mission refers to how we want to achieve the vision. For example, if your vision is wants to be an entrepreneur, your mission should be to get more knowledge and experience as much as possible. Other than that, your mission may be to further your study on a higher level in field of business. But, the vision statement should be short and preferably one sentence. In business, a mission is a declaration of an organization’s “reason for being.” Its reveals what an organization wants to be and whom it want to serve.

Now! We move on the importance of vision and mission statement in an organization.

And for the last, what components should be included in mission statement? Ok! Let’s me tell you. There are nine components in mission statement which are:

Alright! I think that's all for today. I have no idea to talk more. Sorry for the mistake that I'd done. Thank you for took the time to read my blog. (^_^)

* Week 1 *

ASSALAMUALAIKUM..

Hi! See you again! How are you today? Hope all of us are fine. Ok! Without wasting time, today I would like to share about what I’ve learned in week one. Our first topic for this subject is The Nature of Strategic Management. First of all, I want to know what you understand about strategic management. Ok! Think first! (???????????????)

Right now, tell yourself what strategic management is. Done! Ok, good job! (^_^) Now, let’s me tell you about the nature of strategic management. Strategic management refers to determine mission, vision, values, goals, objectives, roles and responsibilities, timeliness, and etc. Meanwhile, strategic plan is a company’s game plan. It is used to help an organization to do better job and to ensure member of the organization are working toward same goals.

I've already explained about the stages of strategic management just now. Now, I’ll explain you about the key terms in strategic management. The key terms as follows:

1)    Competitive advantages: You have a factor that others can’t imitate.

2)    Strategists: Person who are responsible to the success and failure of an          organization.

    3)    Vision & mission statement: What do we want to become? What is our business? How?

1      

     4) External opportunities and external threats: Refers to demographic, culture, social, technological, and etc.

5)    Internal strengths and internal weaknesses: Determined relatives to competitors.

6)    Objectives: Specific results that an organization seeks to achieve basic mission.

    7)    Strategies: May include geographic expansion, diversification, product development, and etc.

   Alright, I think that’s all for today. I will share something new that I’ve learned after this. See you in next entry! Thank you.