MGT 300

How to analyze and develop competitive advantages in the industry? Three common tools - Porter ’s Five Forces Model - Porter’s three generic strategies - Value chains 1.  Porter ’s Five Forces Model   Buyer power - HIGH (customers have many choices of whom to buy from) (as a seller) - LOW (few choices) How to lower - Loyalty programmes - Switching cost   Supplier power - HIGH (buyers have few choices of whom to buy from) (as a supplier) - LOW (buyers have more choices)   Threat of substitute products or services - HIGH (many alternatives to a product or service) (as a seller) - LOW (less alternatives to choose)   Threat of new entrants - HIGH (easy for new competitors to enter market) (as a seller) - LOW (there are barriers to enter market)   Rivalry among existing competitors - HIGH (competition is fierce) (as a seller) - LOW (competition is more complacent) 2.  Porter’s three generic st