SWC1

S18Ln1
S18A1LC?
W Way to understand compet|t|ve advantage
W |ve compet|t|ve forces shape fate of f|rm
1 @rad|t|ona| compet|tors
W CompeLlLors ln markeL space conLlnuously devlse new producLs new
efflclencles swlLchlng cosLs
2 -ew market entrants
W Some lndusLrles have low barrlers Lo enLry
W Lg food lndusLry vs mlcrochlp lndusLry
W newer companles may have advanLages
W newer equlpmenL younger workforce eLc
3 ubst|tute products and serv|ces
W SubsLlLuLes cusLomers can purchase lf your prlces Loo hlgh
W Lg lnLerneL muslc servlce vs Cus
4 ustomers
W Can cusLomers easlly swlLch Lo compeLlLor's producLs?
W Can cusLomers force flrm and compeLlLors Lo compeLe on prlce alone
(LransparenL markeLplace)
3 upp||ers
W 1he more suppllers a flrm has Lhe greaLer conLrol lL can exerclse over suppllers

trategy to be |mp|emented by AVC- kCDU@ to re|nvent |tse|f and beat compet|t|on

W as|c strategy A||gn I@ w|th bus|ness ob[ect|ves
of bus|nesses fa|| to a||gn the|r I@ w|th the|r bus|ness ob[ect|ves |ead|ng to |ower
prof|tab|||ty Lg Avon roducts has not embraced I@ and they need to do so |n order to
market the|r products
@o a||gn I@
W Ident|fy bus|ness goa|s and strateg|es
W reak strateg|c goa|s |nto concrete act|v|t|es and processes
W Ident|fy metr|cs for measur|ng progress
W Determ|ne how I@ can he|p ach|eve bus|ness goa|s
W ,easure actua| performance

W owcost |eadersh|p
Dse lnformaLlon sysLems Lo achleve Lhe lowesL operaLlonal cosLs and Lhe lowesL prlces
Lxample ls where AvCn 8CuDC1S had a workforce of 2 mllllon and 03 Mllllon of Lhem
locaLed ln DSA
W LfflclenL cusLomer response sysLem

W roduct d|fferent|at|on
Dse lnformaLlon sysLems Lo enable new producLs and servlces or greaLly change Lhe
cusLomer convenlence ln uslng your exlsLlng producLs and servlces
It |s |nd|cated that kL@C- was "equa||y determ|ned not to g|ve up h|s trad|t|ona|
markets" ,ean|ng there |s need for product d|fferent|at|on
W ocus on market n|che
Dse lnformaLlon sysLems Lo enable speclflc markeL focus and serve narrow LargeL
markeL beLLer Lhan compeLlLors
W Ana|yzes customer buy|ng hab|ts preferences
W Advert|s|ng p|tches to sma||er and sma||er target markets
Avon products need to promote th|s strategy |n order to w|n customers
Lg PllLon PoLel's CnC SysLem
W Ana|yzes data co||ected on guests to determ|ne preferences and guest's
prof|tab|||ty

W trengthen customer and supp||er |nt|macy
SLrong llnkages Lo cusLomers and suppllers lncrease swlLchlng cosLs and loyalLy
Amazon keeps Lrack of user preferences for purchases and recommends LlLles
purchased by oLhers
|kew|se Avon products needs to |mprove on |ts customer and supp||er |nt|macy as
|nd|cated by phrase "Avon's |mage |n -orth Amer|ca and Western Lurope was sta|e
and down market#