Term Paper on Competition Demystified & Jack Welch: General Electric’s Revolutionary

Topics: Strategic management / Pages: 6 (1406 words) / Published: Feb 14th, 2014
Competition Demystified

1. Which one of the Michael Porter’s 5 forces more important than the others according to Bruce Greenwald and Judd Kahn? Which ones are the truly competitive advantage’s elements?

Bruce Greenwald and Judd Kahn’s opinion related to Michael Porter’s forces defined that the truly durable competitive advantages arise from industry competitors. It is comes from rivalry among the existing firms. The interaction of supply and demand advantages is the source, from the linkage of economies of scale with customer captivity.

The competitive advantage of economies of scale depend not on the absolute size of the dominant firm but on size difference between it and its rival, that is, on market share. If the entrants have equal access to customers as the incumbents have, it will be able to reach the incumbents’ scale. A market in which all firms have equal access to customers and common cost structures, and in which entrants and incumbents offer similar products on similar terms, should divide more or less evenly among competitors.

For economies of scale to serve as a competitive advantage, the, they need to be coupled with some degree of incumbent customer captivity. If an efficient incumbent matches his competitors on price and other marketing features, then, the customer captivity will retain its dominant share of markets.

So the combination of even modest customer captivity with economies of scale becomes a powerful competitive advantage.

2. Describe the 3 sources of competitive advantage other than Government Protection, Patents, Superior access to information, etc.

Cost
The incumbent can lower prices to a level where it alone is profitable and increase its share of the market or eliminate all profit from competitors who match its prices. If we could have the cost leadership by having lower cost structure than competitors, who could be caused by due either to proprietary technology or special resources that cannot be hired

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