The paper 'Five Forces and Value Chain Analysis" is a good example of business coursework. A business’ strategic positioning may be used as a way to increase the revenue it generates. A business operating on a strategy is enabled by the strategy to achieve an advantage in the market over the competitors. Harvard professor, Michael Porter formulated the strategies that can be implemented by business firm’ s managers in any industry under any situation to achieve a competitive advantage in the market. Porter’ s five forces analysis is a structure that is used in competition analysis in a business plan improvement or within an industry.
It revolves around the organization of industrial economics to develop five forces to facilitate the establishment of the intensity of competition and consequently market attractiveness. This attractiveness will be defined by the profit level of the overall industry (Dobbs 2014). A graphical representation of Porter's five forces A value chain refers to the chain of activities performed by a specific firm in an industry so as to deliver a product which is valuable or rather a valuable service for the market.
This whole concept is to create a competitive advantage and sustain a performance that is superior to the competitors in the market (Yan and Wang 2014). The following is a comparison between a retailer company ABC and a service providing company XYZ using Porter’ s Five Forces and Value Chain analysis. Business definition The ABC Company struggle to offer the best quality and most miscellaneous selection of household goods by offering combination discount offers and value packs so as to be able to present these products at lower costs than the competitors, keeping essential goods at unbeatable prices.
Some of the goods provided for sell in the market include household goods such as the utensils and the cutleries among others, the clothing and bicycles. The ABC Company’ s management team believes in Porter’ s generic management strategy to gain a competitive advantage in the marketplace. The main focus of the firm is to offer goods at the most affordable prices by the targeted customers. In connection to the four generic strategies, the ABC employs Low-Cost Focus Strategy which is normally known as "niche marketing. " The firm does this by, picking a precise segment of the market and subsequently directs its product selling straightforwardly to it.
A low-cost account of focus approach entails targeting a market niche and offers the product at the cheapest prices to fit the specific needs of those markets. By doing this the firm increases its market share and the product selling frequency also rises. The company also uses Strategy of Cost Leadership to expand a market share by offering low prices at the same time retaining their margins.
This is done by producing the products in a cost-efficient method (Dobbs 2014). XYZ Company offers banking services to its clients. In the process of their serving, the firm’ s management employs Differentiation Focus Strategy to get the market dominance over the competitors. This account of the focus tactic entails picking a precise segment of the market and instead of offering services at a cheaper price, the business offers differentiated services. Customization is the center of attention of this plan. Customers have services modified to meet their precise desires. Instead of submitting the cheapest service, the firm differentiates its services using other ways.
These include quality service, fashionableness among others. Therefore while the ABC Company focuses on dominating the industry by use of Low-Cost Focus Strategy the XYZ employs Differentiation Focus Strategy but both strategies have proved to be effective in market share expansion and industry dominance. The strategies are among Porter’ s four generic strategies whose remaining two are Cost Leadership Strategy and Differentiation Strategy (Porter 2007)
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