Week 4-Hello, I'm Your Motivational Speaker
Week 4-Hello, I'm Your Motivational Speaker
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Date Created: 11/11/15
Running head HELLO I39M YOUR MOTIVATIONAL SPEAKER Hello I39m Your Motivational Speaker ECO415 September 27 2010 Patrick 039 Donnell HELLO I39M YOUR MOTIVATIONAL 2 SPEAKER Hello I39m Your Motivational Speaker Hello and thank you for joining me today I am glad to see so many of you here interested to learn about some of today s hottest business topics My name is Mai Biz and I am a renowned business guru and motivational speaker I have been contracted by a prestigious national business organization to conduct this seminar today This remarkable seminar I am about to present will cover the topics of competitive advantage and international business I am very excited to share my thoughts however if you have any questions during the seminar please feel free to ask we are all here to learn To begin how many of you have heard of wanted to learn about or have discussed competitive advantage in your respective businesses Approximately 75 of the audience raises their hands Good That is more than I expected I can tell we will have a magnificent seminar already My next question is how many of you are puzzled by competitive advantage Approximately 50 of the audience raises their hands So about half of you then excellent that is why I am here We will begin by first explaining the meaning of competitive advantage Competitive advantage is superiority gained by a firm when it can provide the same value as its competitors but at a lower price or can charge higher prices by providing greater value through differentiation Competitive advantage results from matching core competencies to the opportunities Competitive Advantage 2010 p 1 Competitive advantage allows a company to earn greater returns than the cost of investments Therefore profits are crucial to competitive advantage In fact a primary goal for business strategy is to accomplish competitive advantage Now that we know what competitive advantage is understanding its relationship to international business is crucial As most of you may know international business is simply HELLO I39M YOUR MOTIVATIONAL 3 SPEAKER business that operates on a global scale International business is the frontline for significantly improving and optimizing business systems Further this can create financial and operational gains as well as returns on investments to give corporations the strategy to build competitive advantage Although I have no affiliation I must mention that Michael Porter s Competitive Strategy is a must read he also has many other worthy articles This book gives a superb overview of competitive strategy and analysis Porter states that there are three generic strategies overall cost leadership differentiation and focus on a particular market niche Porter 1998 p 35 Cost leadership requires companies to create policies directed toward growing to be the lowcost producer and distributor in the market For example discount retailers such as WalMart distribute cost savings to their consumers by offering lower prices on goods The store can retain profit margins equally with competitors However for the reason they can save on costs WalMart gains a competitive advantage because they can offer the same goods at cheaper prices Kmart is another example of a cost cutting retailer although WalMart quickly thwarted this strategy by cutting costs even further The second strategy differentiating involves the company designing a unique product to the industry Take HewlettPackard HP for example their printers give them competitive advantage because they offer functions that other printers do not Further they have customer support available 24 hours a day seven days a week The third strategy is focusing This involves researching a target market and concentrating on a product line specific customer geographical area or distribution channel HELLO I39M YOUR MOTIVATIONAL 4 SPEAKER WalMart is an excellent example once again This firm began in small towns in the Midwest and South As the company built its reputation for lowprices and variety the company s knowledge increased as well This led to the ability to expand in the region then the nation and finally into the global marketplace WalMart began by focusing on a cost leader strategy in a defined market and later grew beyond its primary market Analyzing one s organizational needs is essential because each company s goals may differ and require a separate strategy In fact multiple strategies are often employed and together they create competitive advantage Now we will move forward to the strategy of creating value As mentioned earlier a company possesses competitive advantage when it is employing a value creating strategy not in use by any other competitor So how does the company create value An organization can create value by execute known as the value chain This can be accomplished by low cost better quality special offers or promotions something that separates the company and causes an advantage over the competition In international business creating value can come in the form of customized products tailored to a specific country s needs or providing quality the country has never experienced before This sounds like a piece of cake right Just make some different products from what the country has experienced and viola creating value strategy accomplished Unfortunately it is not quite so simple Additional risks arise when companies engage in global trade or international business Some risks include global supply chain uncertainty For example ensuring deliveries can be more difficult because of communication breakdowns shipping expenses are increased because of tariffs fuel costs etc Exchange rates can uctuate as well and that can cause a loss What is more difficult these potential issues must be anticipated and included in the organization s HELLO I39M YOUR MOTIVATIONAL 5 SPEAKER strategy to retain competitive advantage Therefore many challenges are present but many opportunities are present as well International business allows a firm to expand its market globally Further a business can be operated outside of its home country to avoid expenses when laws are overly restrictive Certainly China and India would agree Although these countries are relaxing some regulation s currently the economies are still tough Additionally a company can experience vast returns by operating in wealthier markets So now there are enough opportunities how does the company take advantage of their newly desired market The first step is to organize the organization The company must be well prepared and operate in a highly efficient manner After all production is about to dramatically increase Strategies for accomplishing this goal can be deciding on a mode of entry first This can come in the form of joint ventures foreign direct investment memorandum of understanding etc Comprehensive research of the market is essential and will help in the decisionmaking process Testing the desired market is essential as well Starting with some simple exporting would be a good way to learn about the requirements needs and activities of the market This would also help to reduce risk Another piece of advice that is quite popular is the think globally act locally approach This will help build respect and a reputation with consumers and that will pay longterm dividends In addition to potential issues and risks the organization needs to ask some questions For example does the company possess adequate internal controls for import or export processes Is the trade data accurate and understood so financial systems are not affected and US Customs and Border Protection issues do not arise Who has direct contact with the Chief Executive HELLO I39M YOUR MOTIVATIONAL 6 SPEAKER Officer Chief Financial Officer and Chief Operations Officer to notify them for logistical and risk issues Questions like these would help to alleviate risks and aid in decisionmaking Another concept to consider is the price elasticity of demand Price elasticity of demand is responsiveness of the demand for a good or service to the increase or decrease in its price Normally sales increase with drop in prices and decrease with rise in prices Elasticity of Demand 2010 p 1 Therefore as long as the price elasticity of demand is less than one it is beneficial for a firm to raise prices This allows the company to receive more money for fewer products As prices increase the elasticity tends to increase as well This will cause the price elasticity to be greater than one So a company must understand its intended market so pricing strategies can be accurately developed Some of you may be wondering what makes competitive advantage unique at the global level and how does it differ from the domestic level Economies of scale and the experience curve are greater at the international level Further the risks are higher at the international level however the returns are higher too The international level presents more potential issues than the domestic arena because of differing regulations fees tariffs cultures and laws Another difference is risk is spread across a broad market and economic problems in one country may not hinder returns Possessing such a competitive advantage globally also allows different pricing in various markets For example HP does not sell computers for the same price across the globe Because HP possesses the scale of economy it can charge a different price in North America than it does in China HP can maintain a competitive advantage because can deal with Chinese competitors in China and Canadian competitors in Canada HELLO I39M YOUR MOTIVATIONAL 7 SPEAKER The last point to consider is that competitive advantage is easier to obtain than it is to maintain As the saying goes to experience change you have to experience change Therefore to sustain competitive advantage the corporation must make changes to the strategy as changes in the market occur Another factor to help maintain an advantage is to promote ethical practices This will build a reputation that will keep customers coming back Further identifying opportunities and acting on them will keep the business on top of the market Another factor to consider is that the company must maintain its purpose and remain different from all of the other products in the market FedEx and UPS are excellent examples they continually alter there services and cannibalize each other so there is virtually no room for competition Use caution though CocaCola tried to launch a new avor of Coke and did not properly research the market As most know New Coke failed In conclusion research the market continually and learn about developments in the arena the company operates Further take advantage of information technology in the industry some exceptional tools are available Last avoid becoming content with the business because a collapse may come suddenly if the company is not paying attention to market changes Thank you for your time I hope you could learn from me today I understand how challenging competitive advantage and its relation to domestic and international business can be challenging Please feel free to share questions and experiences as I cherish the opportunity to learn from you HELLO I39M YOUR MOTIVATIONAL SPEAKER References Business Dictionary 2010 Competitive advantage Retrieved September 27 2010 from httpWWWbusinessdictionarycomdefinitioncompetitiveadvantagehtml Business Dictionary 2010 Elasticity of demand Retrieved September 27 2010 from httpWWWbusinessdictionarycomdefinitionelasticityof demandhtm1 Porter ME 1998 Competitive Strategy Free Press New York NY
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