Today lets talk about competitive advantage. what it is? food? cloths?
Actually, it is a product or service that an organization customer place a greater value on than similar offering from competitor. For example,ok lets say supermarket A offer Milo at the price RM 1 while for Vico RM 1.20.Mostly, customer will looking at the taste and quality. some people will looking for the price and the some people will stick with 1 brand because the quality. because all human desire is different.
to make it clear, Porter was develop the five forces Model. it is :-
* Buyer power
*supplier power
*threat or substitute product or service
*threat of new entrance
*rivalry among existing competitor
basically,what i know,buyer power is the power of customer that can give impact toward the producer product. lets say if the Milo who was have many royal customer, and 1 day a new product exactly like Milo, call Bilo, Milo and Bilo will compete the price to attract the customer to purchase their product. If buyer power is high, they can force a competitors to compete on price. mostly, to reduce the buyer power,the will apply switching cost. mostly they will offer a lower price to make a customer turn over from their loyal product to new product.
supplier power is supplier ability to directly impact the price they changing for supplies (including material,labor and service)
for example, if the supplier Milo increase their cost of raw material,it will affect the price to sell at customer. Here the pie chart that explain more details about Porter's five forces model of competition.
so we can know where actually and the actual cost of product and the reason of some price of product is come by study this topic.
*now i know why my product price every month was not fix, sometimes higher and sometimes lower. :)
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