Answer To: XXXXXXXXXXSTRATEGY MANAGEMENT XXXXXXXXXXAssignment - 2 online discussion TOPIC Consider the...
Sangeeta answered on Aug 30 2020
FINAL POSTINGS
Please see the guide lines before replying to these student posts 250 words each post
1st paragraph encourage them for writing that topic and mention what points you liked in their discussion and 2nd paragraph mention what point could be included in their topic. This was not followed for online discussion one so please read the feed back in the question paper what professor has kept for assignment 1 and then start writing. Thank you
Final Posting -1 (student name : Xiaohan Ci):
New entrants and changing conditions are parts of competition
It is easy to view competition too narrowly and too pessimistically, while intense competition in an industry is neither coincidence nor bad luck. In the fight for market share, customers, suppliers, potential entrants and substitute products are all competitors. Moreover, competition in an industry is rooted in its underlying economics, and competitive forces exist that go well beyond the established rivals in a particular industry. Generally, the state of competition in an industry depends on five basic forces, which are displayed in the picture below. The collective strength of these forces determines the ultimate profit potential of an industry, so they are of great importance in strategic management. For example, even a company with a strong position in an industry unthreatened by potential entrants will earn low returns if it faces a lower-cost substitute product. Under this condition, coping with the substitute product becomes the No.1 strategic priority.
Every industry has an underlying structure, or a set of fundamental economic and technical characteristics, that gives rise to these competitive forces. The strategist, wanting to position his or her company to cope best with its industry environment or to influence that environment in the company’s favour, must learn what makes the environment tick. As different forces take on prominence during the shaping process in each industry. In the ocean-going tanker industry the key force is probably the major oil companies, while the steel industry the key forces are foreign competitors and substitute materials. A few characteristics are critical to the strength of each competitive force and two of them will be discussed as follow:
· Threat of new entrants
New entrants to an industry could bring new capacity, the desire to gain market share, and often substantial resources. Companies diversifying through acquisition into the industry from other markets often leverage their resources to cause a shake-up. The seriousness of the threat of entry depends on the barriers present and on the reaction from existing competitors that entrants can expect. If barriers to entry are high and newcomers can expect sharp retaliation from the entrenched competitors, therefore, the newcomers will not pose a serious threat of entering. Barriers to entry mainly from six aspects: economies of scale, product differentiation, capital requirements, cost disadvantages, access to distribution channels and government policy. In addition, the potential rival’s expectations about the reaction of the existing competitors also will influence its decision on whether to enter. The company is likely to think twice if incumbents possess enough substantial resources to fight back. In order to keep market shares, they would reduce the prices, other aspects including using their productive capability, customers and distribution channels.
· Changing conditions
Changing conditions is another important point to note about. It is not surprised that Kodak got into trouble around year 2011. Firstly, the fierce price competition from the market has driven down its produce price by 40%. Eastern Europe and some developing countries also post serious threat to Kodak via cheap film as lower-income group pay more attention to price than brand and quality. Another challenge come upon is the innovation of digital imagines. The disadvantages of the traditional imaging technical becomes more obvious, high cost, heavy equipment and serious pollution are the difficult problems to be solved. While, although Kodak has been feeling the pain of its traditional film business declination, the company’s policy makers dare not develop the digital business because they concern about the film sales. Ignoring the changing conditions puts the era of Kodak to rest. (Baike, 2018)
Analysis
In this posting, Xiaohan Ci makes a good effort of throwing light upon the fact that new entrants and changing conditions are parts of competition. He asserts that the state of competition in an industry depends on five basic forces, which are displayed in the picture below. The collective strength of these forces determines the ultimate profit potential of an industry, so they are of great importance in strategic management.
Every industry has an underlying structure, or a set of fundamental economic and technical characteristics, that gives rise to these competitive forces. The writer makes a strong point by stating that in the fight for market share, customers, suppliers, potential entrants and substitute products are all competitors. Moreover, competition in an industry is rooted in its underlying economics, and competitive forces exist that go well beyond the established rivals in a particular industry (Baike, 2018). The strategist, wanting to position his or her company to cope best with its industry environment or to influence that environment in the company’s favour, must learn what makes the environment tick (Porter’s, 2018). In the post he throws light upon two forces in great detail that is quite good. The explanation of the two chosen forces is also accompanied with case study example of company to add clarity and depth to the discussion. The post could have been further enhanced by summarizing all five forces than just focusing upon two of them.
References
Baike, 2018. Eastman Kodak Company. [Online]
Available at: http://www.baike.com/wiki/柯达
[Accessed 26 August 2018].
Porter, M. E., 2018. How Competitive Forces Shape Strategy. [Online]
Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy
[Accessed 26 August 2018].
Final Posting 2 (student name : Yiming Yuan):
In today's era of globalized competition and fierce competition, strategic innovation has increasingly become an important way for small enterprises to overcome large enterprises and seek survival and growth. This has likewise become an effective way for large companies to re-enter and achieve sustainable growth goals.
According to Hamel's (1998) survey, 62% of CEOs believe that one of the most successful companies in the industry is successful by changing the rules of the game. Only 31% of CEOs believe that companies are successful with better-implementing strategies. By quantifying the strategies of 108 companies around the world, Kim and Mauborgne (2005) found that conventional strategies accounted for 86% of the total strategy, creating 62% of total revenue and 39% of total profits. The innovation strategy only accounts for 14% of the total strategy, but it generates 38% of total revenue and 61% of total profit.
Dell Computer, the first direct sales model in 1984, started with an idea, $1,000, and a college dorm. It took only three years to obtain listed. Since then, from the late 1980s to the early 1990s, Dell has experienced the most significant growth peak, with an average annual sales growth rate of 97% and...