1. Let's say a company from a low-cost-structure country enters your market. What is the first step would you take to develop an effective plan to remain competitive?
2. Relying solely on your impressions, evaluate the effect of the five forces that drive competition in the industry in which your organization competes.
3. Relying solely on your impressions, briefly describe one current strategic change from any three of the STEEP-MCCCS categories described in 'Note on SWOT analysis', and for each, describe whether the change might be positive or negative for your organization (which you do not have to name).
4. How does environmental analysis at the domestic level differ from global analysis?
Effective Plan to Remain Competitive
Companies can remain competitive through the use of well structured strategies. Sainsbury is the well established retail company in the UK. When a new company enters in the market that is related with low cost structure country, it is necessary for Sainsbury to develop effective plan for remaining competitive in the market. For this, company would take first step to analyze market and competition thoroughly with the help of SWOT analysis and environmental analysis (Palestini, 2008). Through this, company would identify strengths, weaknesses, opportunities and threats and potential problems of the market and new competition.
With the help of SWOT analysis, company would know about available resources that are helpful to gain competitive advantage over new firm and profitability of the company (Palestini, 2008). Along with this, company would identify its weak areas that can be improved by taking necessary actions. Through opportunity and threat analysis, company would recognize situation and strategies of competitors, opportunity in market, threats of new entry and increasing competition (Walker, 2003). Company would also try to strengthen the entry barriers to avoid the easy entry of the new firm. Opportunities can arise due to changes in external environment and changes can be perceived as a threat to existing position of the company and product line, so necessary changes would be made in product line to remain competitive in the market.
After this, company would make a strategic plan and create a framework to develop budget and recommend effective use of company's resources to achieve corporate goals and remain competitive in the market (Palestini, 2008). Under this plan, competitive pricing strategies and implementation of new technology would be used by the company to attract customers and increase their loyalty for the firm to avoid the threat of new firm from low-cost country.
Effect of Five Forces
Following are five forces and their impact on organization:
Rivalry: Rivalry between companies drives profits to zero and there is large number of similar size firms that compete with each other for customers. Sainsbury has competition from Tesco, Asda, Marks ...
The effective plan to remain competitive are determined. The expert gives the five forces that drive competition and strategy.