Question

1- Describe the 4 ways of creating competitive advantage.

2- Define and discuss the value chain

3- Describe and discuss TQM

Answer 1

Answers: 1.

4 Ways of Creating Competitive Advantages

1) Overall cost leadership

The strategy of cost leadership is based on that the organization should maintain a least cost of production in the industry. The organization should try to reduce its overall cost by implementing innovation, technology, efficient scale facility, etc. The organization have to create a large market share in order to ensure the unit cost of production is minimum and maintain a couple cost leadership to gain a stable source of competitive advantage.

2) Differentiation

Differentiation is one of the strategies to build competitive advantage. Differentiation refers to the act of developing a set of significant differences to differentiate the company's product and its competitors' products. Hence, divergent product in the market helps to attract customers and they can easily distinguish between products and thereby achieve higher profitability and brand image.

3) Cost focus

The approach of cost focus aims at reducing the price of product and focuses on narrow market segment or customers. Through this strategy the business aims at achieving loyal customers and retains them. By focusing on cost, the business could reduce the cost and charge comparatively low price than its competitors for the product thereby achieve competitive advantage.

4) Focused differentiation

This focused strategy of differentiation aims at narrow segment of the market. The strategy helps to generate more value on customers as it involve product differentiation as per the needs and wants of customers thereby achieve customer loyalty. Focused differentiation can be gained through detailed research and better understanding of the customer needs and wants. It helps to create competitive advantage of a business.

Answer: 2.

Value Chain

Value chain is the process or activities performed by a firm in order to add value to its product. Simply, value chain creates value for a product of a company. Value chain includes the production process, logistics, marketing, after-sales service, etc. Value chain concept is significant in both manufacturing and service providing companies. Value chain covers the entire process from the production process to delivery of the product to the end customer, hence it compile all the economic activity involved in a business process. Therefore, we can say the concept of value chain is applicable to the whole supply chain and distribution process, as each process handle its own value chain.

Answer: 3

Total Quality Management

TQM is a measure of quality control within the organization. TQM is the process of improving the overall quality in the production dimensions of a business in order to maximize the quality of product. TQM is continuous process, as it involves plans and strategies that the organization should strictly be followed. The main aim of implementation of TQM in a business is to retain its existing loyal customers and attracting more customers by fulfilling or exceeding their expectations. TQM system helps the company to reduce cost and improved product quality thereby achieve competitive advantages. TQM try to trace out the problems in operations and take quality control measures in order to improve and maintain quality of products.