Question

1)Explain the concept of competitive advantage and value proposition and how they relate to the overall business management.

2)Explain environment scanning and the PESTEL checklist for a company’s general environment.

3)Explain the impact of Porter’s “five forces” on industry profits.

Answer 1

1) competitive advantage- Assume an organisation having supremacy over the market by producing the required goods on par with the market forces at relatively lower prices .This organisation may sell the products at higher prices owing to its supremacy.Value proposition means adding some extra flavour may be in the form novelty ,quality or an innovation in order to encourage and attract customers​to buy more and will be used it for publicity these two play vital role in business management as they try to aggrandize​ the business by all means like planning , advertising, providing incentives, strategies, quality products etc all these help the business grow and are interrelated .

2) environmental scanning is a way of attaining the data regarding the organisation's working nature and performance within in the organisation.Planning , establishing good relations among the employees ,developing the organisation according to future needs etc are part of the environmental scanning.PESTEL is a concept to analyse the external forces (environmental) impact on organisation's nature.which testifies the pros and cons of organisation by this model.adding environmental and legal values to PEST(the most basic model to assess the organisation's working nature)is PESTEL concept.

3)Porter's five forces was proposed by Michel.E.Porter the then Harvard university professor to analyse the attractiveness of an organisation that includes profitability.the five forces include competitive rivalry,supplier power,buyer power,threat of new entry and threat of substitutes. If these forces are high no industry can earn maximum profits one example as such is airline industry. So the organisation's goal is to check all these forces from time to time in order to be in profitable mode.customer capacity,buyer capacity should be assessed .New entries like reputation of the brand , substitutes' entries like their performance should be kept mind in order to earn maximum profits as the theory says.