StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

DQ1 e-activity and DQ2 Competitive Advantage - Essay Example

Comments (0) Cite this document
Summary
Porter (2008a) identified the five competitive forces that shaped strategy as the threat posed by new entrants, the intensity of rivalry, threat posed by substitutes, the bargaining power of buyers, and suppliers’ bargaining power. Hill and Jones (2009) identified the risks…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.7% of users find it useful
DQ1 e-activity and DQ2 Competitive Advantage
Read TextPreview

Extract of sample "DQ1 e-activity and DQ2 Competitive Advantage"

E-Activity and Competitive Advantage QD1 Activity: E-Activity The five competitive forces that shape strategy Porter (2008a) identified the five competitive forces that shaped strategy as the threat posed by new entrants, the intensity of rivalry, threat posed by substitutes, the bargaining power of buyers, and suppliers’ bargaining power. Hill and Jones (2009) identified the risks posed by new entrants and substitute products on an existing firm’s profits and market share (p. 43). On the other hand, Porter (2008b) noted, that industries characterized by suppliers possession of bargaining powers were less attractive (p. 13). Conversely, the bargaining power of buyers had an effect on an industry’s competitive pricing and consumer’s demand for better services, which affects the strategy of a firm (Porters, 2008b, 14). In this case, firms in the industry where customers have bargaining power experienced instances whereby consumers pressed for price reductions. Finally, the rivalry influenced the profitability of firms in an industry depending on the intensity of the rivalry and the basis of a firm’s rivalry (Porters, 2008b, 18).
Online Auction Industry
The online auction industry experiences robust growth due to the ongoing global internet and technological innovations although Yahoo, Amazon, and eBay are the most dominant firms in the industry (Bajari & Hortaçsu, 2004, p. 459). Nevertheless, the availability of online auction software in the industry, coupled with the low costs of establishing start-ups and cheap hosting services available, pose a threat of new entrants into the industry. In effect, the fact that the cost of start-ups in the industry is cheap makes the bargaining power of suppliers low in the online auction industry. On the other hand, buyers in the industry hold high stakes in a company’s profitability and success due to the bidding platform that the industry provided (Pinker, Seidmann, & Vakrat, 2003, p. 1457). In this case, buyers will control a firm’s strategy in the online auction industry since they have an option of buying the same commodities online from other dealers at a price of their choice. On the other hand, rivalry amongst firms in the industry results from the bidding platform offered, which brings intense rivalry (Stafford & Stern, 2002, p. 135). Finally, other resellers and auctioneers that are not internet based pose the substitutes’ threat in the online auction industry.
References
Bajari, P., & Hortaçsu, A. (2004). Economic Insights from Internet Auctions. Journal of Economic Literature, 42(2), 457-486. Retrieved from http://www.jstor.org/stable/3217179
Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach (9th ed.). Mason, OH: South-Western, Cengage Learning.
Pinker, E. J., Seidmann, A., & Vakrat, Y, (2003). Managing Online Auctions: Current Business and Research Issues. Management Science, 49(11), Retrieved from http://www.jstor.org/stable/4133995
Porter, M. E. (2008a). The Five Competitive Forces That Shape Strategy. Harvard business review. Retrieved from http://hbr.org/2008/01/the-five-competitive-forces-that-shape- strategy/ar/1
Porter, M. E. (2008). On Competition (2nd ed.). Boston, MA: Harvard Business Press.
Stafford, M. R., & Stern, B. (2002). Consumer Bidding Behavior on Internet Auction Sites. International Journal of Electronic Commerce, 7(1), 135-150. Retrieved from http://www.jstor.org/stable/27751048
DQ2: Competitive Advantage
Mergers for Company Growth and Profits Maximization
Small businesses in the online industry face challenges in terms of market share and lack of a brand name in the industry. In effect, it is difficult for small businesses to gain customer loyalty and a large market share, which will enable the companies make maximum profits. Therefore, a small business should use strategies that will enable the business make profits and experience growth. The best strategy in the case of a small business in the online auction industry will be through a merger with another player in the industry and especially with one of the market leaders, which will expand the market of both businesses (Hunt, 2009, p. 7). In addition, the business resulting from the merger will offer customers a wide range of products and realize economies of scale (Kambil & Heck, 2004, p. 187). In this regard, the fact that building a brand and gaining customer loyalty is challenging for a small business in the online industry informs the rationale for the choice of a merger for the small business.
Effective way to sustain and extend a competitive advantage
With the advent of globalization and the internet, small businesses in the online auction industry have no choice but to have a global outlook. Thus, any business in the online auction industry should venture into new markets in order to sustain its profitability and extend its profitability. However, it is a challenge for such a business to be competitive in a market dominated by a few players. In effect, the most effective way to sustain and extend competitive advantage in the industry is by seeking joint ventures with other organization in the same industry, and especially when entering new markets (Robinson & McDougall, 2001, p. 660). Joint ventures are a strategy that firms have used with success in this industry. Case in point, MindArk, a Swedish online gaming company, formed a joint venture with Cyber Recreation Development to develop the largest online gaming platform in the Chinese market. On the other hand, ChinaYouTV and HuaJu jointly ventured to turn HuaJu into the Chinese version of YouTube with wide success in the country (Garbade, 2009, p. 63).
References
Garbade, M. J. (2009). International Mergers & Acquisitions, Cooperations and Networks in the E-Business Industry: Focused on Google, Yahoo, MSN, YouTube, MySpace, Facebook, Studivz and Others. Munich: GRIN Verlag.
Hunt, P. A. (2011). Structuring mergers & acquisitions, a guide to creating shareholder value. (4th ed.). Austin, TX: Aspen Publishers.
Kambil, A., & Heck, E. V. (2002). Making Markets: How Firms Can Design and Profit from Online Auctions and Exchanges. Boston, MA: Harvard Business Press.
Robinson, K. C., & McDougall, P. P. (2001).Entry Barriers and New Venture Performance: A Comparison of Universal and Contingency Approaches. Strategic Management Journal, 22 , 659-685. Retrieved fromhttp://www.jstor.org/stable/3094325 Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“DQ1 e-activity and DQ2 Competitive Advantage Essay”, n.d.)
DQ1 e-activity and DQ2 Competitive Advantage Essay. Retrieved from https://studentshare.org/management/1595716-dq1-e-activity-and-dq2-competitive-advantage
(DQ1 E-Activity and DQ2 Competitive Advantage Essay)
DQ1 E-Activity and DQ2 Competitive Advantage Essay. https://studentshare.org/management/1595716-dq1-e-activity-and-dq2-competitive-advantage.
“DQ1 E-Activity and DQ2 Competitive Advantage Essay”, n.d. https://studentshare.org/management/1595716-dq1-e-activity-and-dq2-competitive-advantage.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF DQ1 e-activity and DQ2 Competitive Advantage

Competitive Advantage

...that competition among organisation is a race for mastery of competence to secure market position and power. Core competencies are increasingly crucial organisation’s ability because of its relevance in the prosperity of the organisation in the marketplace. The company can use its competences to develop their unique products and services and market them to gain more profits than their competitors. Similarly, choosing people with required skill and expertise, upgrading or expanding employee’s capacities through training enhances the competitive advantage of the company. As the experience builds up the organisation reaches the level of its ability to carry its activities...
5 Pages(1250 words)Research Paper

Competitive Advantage

.... The company has realized increased assortments on its services. This had made its customer base to increase a thing that gives it competitive advantage over the other firms. Investing in new civil engines and the capability of powering a broader range of aircrafts has given it some competitive advantage since the company's market share of civil aeroplane engines has been raised up to a forty percent mark in the last ten years. Its production of long life fleet of engines that provides a considerable opening for those service activities that are profitable is also a major source of its competitive advantage. The supply to over two thousands commercial and naval marine clients in over two hundred nations had made it a world leader... ...
8 Pages(2000 words)Case Study

Competitive advantage

...a chance to control production (Kazmi 2008). In instances where the company wishes to increase output, it simply increases the input. This is not the case where suppliers have to be negotiated with leading to wastage of time. The organisation is also able to achieve exclusive access to a scarce resource which offers a barrier to entrants and offers a direct competitive advantage. Expansion of core competences When engaging in activities previously offered by suppliers and customers, a firm improves on its employees’ core competences. This in turn results in increased satisfaction in the workforce which is important towards achieving organisational goals. Customer service benefits A firm...
6 Pages(1500 words)Essay

Competitive advantage

...Nucor Case Study Instead of a separate performance appraisal system, Nucor judges performance based on quality, productivity and profitability. What are the advantages and disadvantages of Nucor’s choice? The primary advantage that Nucor gets out of its performance judgement system is outstanding labour relations. There are no union based problems as employees are satisfied and trust the company for their good. Moreover, Nucor’s system helps employees earn more money than their counterparts through innovative schemes. This ensures that the most productive people are brought to the front and appreciated accordingly. In most other workplaces, all people earn equal salaries whether they work equally or not....
2 Pages(500 words)Essay

Samedaymay30 DQ1 EA-Activity and DQ2 : Time, Risk, and Options

...Risk Allocation in Subcontractor Contracts Major Risks in Subcontracting An agreement enforceable by law, made between two or more parties is a contract. Occasioned by a number of interpretations, oral contracts in most cases are void as there are no references for agreements made therefore written contracts in the event of collusion do supersede oral contracts (Blum, 2011). In addition, a clear addressograph should be contained in the contract to ensure that one is bound and obliged by the intended clientele. In order for enforcement, there is need to indicate that what is written down is an agreement of both parties, secondly, any manipulations made to the contract must be affirmed by both parties in writing. Moreover... Allocation in...
1 Pages(250 words)Essay

Competitive Advantage

...Competitive Advantage Affiliation: Factor Tim’s Coffee Shoppe Competitor Queequeg’s Coffee) Competitor 2 (Tim Hortons) Score Comments Score Comments Score Comments Quality 3 Minor strength 3 Minor strength 4 Major strength Location 4 Major strength 3 Minor strength 3 Minor strength Employees 2 Minor weakness 2 Minor weakness 3 Minor strength Profitability 2 Minor weakness 2 Minor weakness 3 Minor strength Product 4 Major strength 2 Minor weakness 3 Minor strength Price 1 Major weakness 2 Minor weakness 2 Minor weakness Service 3 Minor strength 3 Minor strength 3 Minor strength Advertising 2 Minor weakness 3 Minor strength 4 Major strength Total 21 20 25 1 – Major weakness, 2 – Minor...
4 Pages(1000 words)Research Paper

Competitive Advantage

...Competitive advantage It is the desire of every company or organization to the on top of its game in all areas. This is better termed as competitive advantage and its entails a company having pool of dynamic skills, strengths and abilities that will propel it far above its competitors. In addition to being the very best in the industry, some companies find it more appropriate to differentiate their products and services from those of other companies (Pearce & Robinson, 2012). In an effort to create an edge in competitive advantage, it is advisable to factor in all areas such as cost, differentiation and speed (Pearce & Robinson, 2012)....
1 Pages(250 words)Assignment

Competitive Advantage

...Barnes & Noble is the industry leader in the book industry. The company generated $7.13 billion in sales in (Barnesandnobleinc, . The organization holds various competitive advantages over a small bookstore. As a public company whose stocks are traded in the New York Stock Exchange Barnes & Noble has greater access to capital than small bookstores. The firm has the ability to raise capital through the sale of stocks and bonds. The company also has a superior marketing and advertising budget which has enabled Barnes & Noble the ability to build brand value. Barnes & Noble has the greatest product variety in the industry in both books and e-books. Due to the size of the company the firm is in a better position to offer lower prices... & Noble...
1 Pages(250 words)Assignment

Competitive Advantage

...Competitive advantage Lecturer Competitive Advantage Introduction Business organizations around the world are always faced with the challenge of rival organizations trading in similar products or services. It is never guaranteed that a business organization that tops above others will remain at the top. It has to look for different means that will keep it at the top by seeking means to win more clients while earning maximum profit. This sustenance at the top is made possible by employing strategies that the organization can ride on. This paper focuses on the nature of competitive advantage in relation to two models; namely, the Porter’s...
4 Pages(1000 words)Research Paper

Entrepreneurship & Small Business Management

...(greater value to customers) which the business will offer. Alderson2 “was one of the first to recognize that firms should strive for unique characteristics in order to distinguish themselves from competitors in the eyes of the consumer” (Hoffman 2000). Michael Porter has postulated four generic business strategies for gaining competitive advantage. These strategies are related to the extent to which a business differentiates its products and the scope of its activities (narrow versus broad). Differentiationinvolves selecting criteria used by buyers and positioning the business to meet the same. Often this strategy is related to premium pricing, which reflects high production costs and...
10 Pages(2500 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic DQ1 e-activity and DQ2 Competitive Advantage for FREE!

Contact Us