(Abell Model, 2015 Critical evaluation: The Abell model is a focused tool. It exists of three dimensions and therefore it does not cover all aspects such as governmental or other parties. SWOT analysis Description: SWOT stands for strengths, weaknesses, opportunities, and threats. It analyses the internal strengths and weaknesses of an organization, and external opportunities and threats faced by it. Motivation: The SWOT analysis will be used to describe the business itself.
Each of the three strategic options included the context of two aspects of the competitive environment which is competitive advantage and competitive scope. Competitive advantage is use to differentiate the products or if they are lowest-cost producer in the industry. Competitive scope described competition in the market in order to determine the company for a wide range of markets or it is focused on a very narrow niche market. For cost leadership strategy, the benefit of as the cost leader in any market is they are able at the lowest cost production of products competitive advantage. The reason to use this strategy to get succeed, the company has become a cost leader, rather than one location businesses want to achieve the position.
Businesses should seek to find their competitive advantage, as opposed to their comparative advantage. They should focus on what they can do better than any other business. This may be something different than what they are best at doing. This maximizes the value of a business's economic function. 5.
However, it has been acknowledged that, in differentiated products markets, tough competition may rule the market even when only two firms compete. The reason is that in these markets the degree of competition depends on the differentiation of the product rather than on the number of competitors. Then, the extent to which the merging firms will increase prices will depend on the degree of substitution between the merging products and the remaining ones. More specifically, the potential enhancement of market power due to a horizontal merger is analyzed under the unilateral effects or coordinated effects of the merger. While coordinated effects refer to the scope of collusion, facilitated by the lower number of competitors, unilateral effects refer to the risk that the merged firm, acting independently of any remaining rivals, finds profitable to raise prices after the merger.
The given individual company’s performance may be better or worse than the industry it belongs as a whole. Understanding the industry or multiple industries where the company competes is essential to develop a baseline for understanding the external conditions and competitions the company is facing currently and in the future. This can be analysed by using Michael Porters’ five forces framework. The five forces analysis simplifies an industry’s competitive environment and it’s profitability. The five basic forces are: (1) Bargaining Power of Customers.
The three theories of job choice are the objective theory, the subjective theory and the critical contact theory. The objective theory presumes that applicants base their job choices on a “weighting of the advantages and disadvantages of each offer in terms of objectively measurable factors” (Behling et al., 1968, pp. 14-15). Harold & Ployhart (2008) mention that objective theory suggests that applicants’ job choice decisions are based on tangible job and organization attributes. This implies that a job seeker is most likely to choose a job or organization that offers the most attractive package of job and organization attributes.
This concept was used by these researchers Spanos & Lioukas to illustrate that there exist a complementarity between these two perspectives. In their illustration, they divided the SWOT analysis components into two separate components one representing the market driven perspective which covers the opportunities and the threats analysis, while the other component represents the resource-based perspective and covers the analysis of the strengths and weaknesses sections in the SWOT (Spanos & Lioukas, 2001). Their purpose is to determining the relative impact industry and the firm specific factors such as; resources, industry forces, strategy, and firm performance, has on the market performance and also of profitability. The result from this SWOT analysis, illustrates the complementarity between Porter’s market driven strategy and the resource-based perspectives in three different relationships. Firstly, the two perspectives complement one another when we consider the strategy effects.
Hence, it indicates that L’Oreal Company have a strong internal position in the company. Apart from that, L’Oreal Company can identify what is the strength and weakness of their company by having IFE Matrix. Next, the strong points of this company are on their research and development, brand name. On the other hand weak their weak point are regarding price, product supply problem and management issue. With IFE Matrix, L’Oreal Company can overcome their weakness and have competitive advantage in the market.
They often attempt to achieve excellence have been focused on perhaps one or two supply chain building blocks-and not, as they should be, on all of the dimensions required for the best performance. Five dimensions of supply chain management through the implementation procedure that are required to achieve a better performance. Which are: Strategy-specifically, the alignment of supply chain strategies with the overall business direction,: What level of customer service must we provide to each customer segment to compete effectively? 2. Infrastructure, which affects cost-service performance and establishes the boundaries within which the supply chain must operate.
Porters Five Forces Model Five forces model is one best approach to evaluating a company's competitive position in light of the structure of its industry. The five forces are buyer power, potential entrants, suppliers, substitute products, and industry rivals. The organization applies the model by developing a list of factors that fit under each of these headings (Chase et al. 2007). The following are the external factors affecting Amazon based this model: Buyer Power The following external factors support the bargaining power of customers: • Customers are exposed high quality of information regarding Amazon’s competitors.