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competitive advantage

a product or service that an organization's customers place a greater value on than similar offerings from a competitor

Organizations must develop a strategy based on a new _____

competitive advantage

First mover advantage

occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

environmental scanning

the acquisition and analysis of events and trends in the environment external to an organization

Five Forces Model

helps determine the relative attractiveness of an industry

5 Forces of the Five Forces Model

Buyer Power, Supplier Power, Threat of substitute products or services, threat of new entrants, rivalry among existing competitors

Buyer Power

High when buyers have many choices of whom to buy from and low when their choices are few

Loyalty program

rewards customers based on the amount of business they do with a particular organizaiton

Supplier power

high when buyers have few choices of whom to buy from and low when their choices are many

supply chain

consists of all parties involved, directly or indirectly, in the procurement of a product or raw material

Business-to-business marketplace

an Internet based service that brings together many buyers and sellers

private exchange

a B2B marketplace in which a single buyers posts its needs and then opens the bidding to any supplier who would care to bid

reverse auction

auction format in which increasingly lower bids are solicited from organizations willing to supply the desired product or service at an increasingly lower price

threat of substitute products or services

high when there are many alternatives to a product or service and low when there are few alternatives from which to choose

switching costs

costs that can make customers reluctant to switch to another product or service

monetary cost

A switching cost need not have an associated ______

threat of new entrants

high when it is easy for competitors to enter a market and low when there are significant entry barriers to entering a market

entry barrier

product or service feature that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and survive

rivalry among existing competitors

high when competition is fierce in a market and low when competition is more complacent

business process

a standardized set of activities that accomplish a specific task, such as processing a customer's order

value chain approach

views an organization as a series of processes; each of which adds value to the product or service for each customer

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