On Competition
On Competition
There are five underlying factors that affect an industry and a firm’s profitability:
- Threat of new entrants
- Bargaining power of suppliers
- Bargaining power of buyers
- Threat of substitute products or services
- Rivalry among existing competitors
Power of Information
Providing the right information at the right time to the right people can provide a firm a significant competitive advantage in:
- Lowering costs
- Supporting differentiation strategies
- Extending scope or reach of the firm
- Fostering new businesses
The Competitiveness of Locations
Locale should play a key role in corporate strategy. Global companies are headquartered and often perform much of their work from headquarters. To compete globally, firms must:
- Find a unique competitive position
- Develop and maintain a long-term perspective. Developing and educating new market can take time
- Don’t market the same way in all countries
- Innovate and perform core activities in your headquarters
- Perform non-core activities in other areas to extend your influence
Competitive Solutions to Society Problems
Green
- A clean environment doesn’t need to increase costs and reduce competitiveness
- Contamination generally points to sloppy design and poor production processes
- Improving productivity can reduce pollution, help you to become more efficient, and to better compete
- Regulations are necessary to motivate innovation
Health Care
- The threat of malpractice lawsuits unnecessarily increase medical costs
On Competition
Highlights by David Willden