Английский язык. Практический курс для решения бизнес-задач - стр. 57

– an unfulfilled customer need;

– arrival of new technologies;

– loosening of regulations;

– removal of international trade barriers.

Threats. Changes in the external environment also may present threats to the firm. Examples of such threats include:

– shift in consumer tastes away from the firm’s products;

– emergence of substitute products;

– new regulations;

– increased trade barriers.

A firm should not necessarily pursue the most lucrative opportunities. Rather, it may have a better chance at developing a competitive edge by identifying a fit between the firm’s strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.

To develop strategies that take into account SWOT profile, a matrix of these factors can be constructed.

SWOT Matrix

– S-O strategies pursue opportunities that are a good fit to the company’s strengths.

– W-O strategies overcome weaknesses to pursue opportunities.

– S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.

– W-T strategies establish a defensive plan to prevent the firm’s weaknesses from making it highly susceptible to external threats.

Source: www.quickmba.com

To analyze the specific activities through which firms can create a competitive advantage, it is useful to model the firm as a chain of value-creating activities. Michael Porter identified a set of interrelated generic activities common to a wide range of firms. The resulting model is known as the value chain:

Inbound logistics > Operations > Outbound logistics > Marketing & Sales > Service

The goal of these activities is to create value that exceeds the cost of providing the product or service, thus generating a profit margin.

– Inbound logistics include the receiving, warehousing, and inventory control of input materials.

– Operations are the value-creating activities that transform the inputs into the final product.

– Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc.

– Marketing & Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing, etc.

– Service activities are those that maintain and enhance the product’s value including customer support, after-sale services, etc.

Primary activities may be vital in developing a competitive advantage. For example, logistics activities are critical for a provider of distribution services, and service activities may be the key focus for a firm offering on-site maintenance contracts for office equipment. These five categories are generic and include specific activities that vary by industry.

The primary value chain activities described above are facilitated by support activities. Porter identified four generic categories of support activities, the details of which are industry-specific:

– Procurement – the function of purchasing the raw materials and other inputs used in the value-creating activities.

– Technology Development – includes R&D, process automation, and other technology development used to support the value-chain activities.