Competencies and Competitive Advantage

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Recommended: Analysis Porter’s Five Forces model

Competencies and Competitive Advantage

In today’s technologically advanced environment, computers are everywhere. Electronic devices are in incorporated into our lives from the mirrors in our bathroom to the smart phones in our pockets and everything in between. The vision of Andrews, Inc is “To be the manufacturer’s choice for sensors, powering the things of everyday life.” Our goal is to build sensors which are adequate, affordable and accessible to the business customers building the products of today. The Andrews business customer is looking for sensors which will get the job done. Put another way, they are need a basic sensor designed to meet their product needs. Our customers are looking for ways to increase their contribution margins and maintain a reasonable price point for their consumers. Lastly, these business customers need the product to meet their production schedule. It is essential to be a key supplies contributing to the customers value chain activities.

In order to meet these goals in a competitive business arena, the management team, in agreement with the Board of Directors, has selected a cost leadership strategy with a product lifecycle focus. An article on The Business Models and Strategies blog (Michail, n.d.) highlights Porter’s view of the strengths of this business strategy against the five competitive forces.

1. Focusing on lower costs offers room to maneuver prices when competitive rivals, in attempt to gain competitive advantage, try to drive down the product price point. Andrews will have the advantage of a higher contribution margin in order to maintain profitable returns.

2. It acts as a defense against powerful buyers looking for price matching from rivals.

3. The low price...

... middle of paper ...

...vestment back into assets of the corporation.

• Return on Sales - 10%

o Current performance as indicated that Andrews is one of the top performers in this score. As market share increases, the return on sales will also increase. While typically an indicator skewed to in the interests of management instead of investors, Andrews has scored while in comparison to most of the other firms. A small percentage is included to somewhat diversify the score and risk using only a few indicators.

Works Cited

Main Course Page. (n.d.). Main Course Page. Retrieved February 6, 2014, from http://www.capsim.com/menuapp/studentmain.cfm?studentkey=1030878

Michail, A. (n.d.). Business Models & Strategy. : Ways of Achieving a Cost Leadership Strategy. Retrieved February 6, 2014, from http://strategy-models.blogspot.com/2011/06/ways-of-achieving-cost-leadership.html

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