Competitive Advantages

For this chapter, I had learned about two types of analysis which is SWOT analysis and PESTLE analysis. SWOT stands for strengths (strong brand names, good reputation), weaknesses (poor reputation among customers), opportunities (arrival of new technologies), and threats (increased trade barriers) while PESTLE is an acronym for political (bureaucracy, government), economical (economic growth, inflation rate), social (social mobility, attitudes to work), technological (internet, automation), legal (consumer law, employment law), and environment (weather and climate change).

SWOT is a strategic planning method used to evaluated strengths, weaknesses, opportunities, and threats but PESTLE is to analyze the industry situation and these 6 elements will shape an organization.

*for more information about SWOT analysis, feel free to click this links: http://www.mindtools.com/pages/article/newTMC_05.htm                   

http://www.businessballs.com/swotanalysisfreetemplate.htm

Besides, I also learn about five competitive forces which is rivalry of competitors within its industry, new entrants into an industry and its markets, substitute products that may capture market share, bargaining power of customers, and bargaining power of suppliers.

For example, we can see in Nokia’s company :

1.       Rivalry of competitors within its industry

-          Nokia had face intensive competition in mobile phone industry such as Samsung and Sony Ericsson.

  

2.       New entrants into an industry and its market

-          Actually, Nokia is in medium level in mobile phone industry. Before this, Microsoft Corporation announce its decision to enter the mobile phones market and it could bring the big threat to Nokia. But it’s only an announcement.

3.       Substitute products that may capture market share

-          Nokia is weak in substitute product and there is no direct substitute in mobile phone industry.

4.       Bargaining power of customers

-          Since the market becomes more sensitive to the price, Nokia could meet the strong bargaining power from them the buyers.

5.       Bargaining power of suppliers

-          Since Nokia is the market leader in the mobile phone industry, Nokia is in the strong position.