Competitive advantage of Firms in Global Industry

Competitive advantage of Firms in Global Industry THE COMPETITIVE ADVANTAGE OF FIRMS IN GLOBAL INDUSTRY Introduction First and foremost, the important aspect to note and to discuss is the creation and sustainability of competitive advantage of multinational enterprise in the Global world and how strategies formed by each firm contributes to competitive advantage. Strategic competition An industry regardless is a combination of group of competing companies providing services or products that compete directly with each other. Products are encircled by strategically oriented industries especially if they have similarities in competitive advantage. The industries who share the same consumers, technologies, production channels, and etc. have their distinct way of competitive advantage requirements. Multinational enterprise competition is either won or lost depending on how successful their strategic competitive advantage favors them. The industry is an open avenue where multinational enterprise can compete with each other. Firms use competitive advantages to sustain and maximize profit for themselves although, there is no best competitive advantage but only the strategic means that is in favor of the firm succeeds. There are two major aspects to be considered while choosing a firms competitive advantage. The structure of the industry where the firm competes. The industrial competitiveness differs to each other, so for sustainable profits, not all industries offer same opportunities. Positioning within an industry: competitive positioning is very important but some multinational enterprise in a highly attractive industry may still be in difficult situation and might not have earned satisfactory profits if it has not chosen the right competitive positioning. Changes in the structure or entry barrier of industry can influence the attractiveness of the industry. Analytical structure of industry There are five competitive forces that explain what multinational enterprises undergo in order to compete with each other in the industry. They are as follows: The threat of new entrants into the industry The threat of substitute products or services of another firm Suppliers bargaining power Buyers bargaining power Rivalry among the existing competitors The performance and the profitability of each multinational enterprise are determined by the strength of the above mentioned five forces. Many industries where by the five forces favors them performs profitably well with great invested capital returns such as soft drinks, database publishing, pharmaceuticals etc. Whereas, industries which experiences pressure from one or more of those five forces tends to struggle and few among the firms in the industry realize profitability for a long term. The five forces are the basic tools used in determining the profitability of the industry because the prices firms charge are controlled by these forces and likewise the cost they have to bear and above all the investment required to competing in the industry. for instance, when a new entrants surfaces, there would be limits to the overall profit potential in the industry due to the fact that new entrants would bring fresh capacity and would look for market share pulling down margins. Higher cost of competitiveness brings about more profits for example, advertising, sales expense or passing on profits to customers in form of lower prices. Competitors tend to lower the price they charge on of products due to the presence of close substitute products. The structure of the industrys function is determined by the strength of each competitive factor for instance, the extent at which an enterprises sales is at risk to any one buyer and the issue of price sensitivity. This is regarded as buying power. Multinational enterprise can use their strategy influence the five forces to raise barriers of entry for instance the introduction of computer information to airline industry has raised the entry barrier as any new enterprise would require investment in hundreds of millions of pounds. Industrial structure varies and are different to each other depending on the type of industry it is such as the pharmaceuticals where barriers of entry is very high and difficult to penetrate due to the need of huge fixed research and development costs and economies of scale in selling to physicians. Getting and developing a substitutes and effective to drugs is not an easy task. The structure of the industry creates differing requirement for success such as differing skills and resources in different industries. Furthermore, multinational enterprise must be structurally attractive in the industry with sustainable entry barriers such as technology, skills, channels access and reputation of brand/product. Factor that might affect competitive advantage of multinational enterprise is the standard of living which would depend of the capacity of the firm to penetrate structurally attractive industries. Structural change helps competitiveness and creates opportunities for competitors to penetrate new industries. Structural change creates avenue for competitors to penetrate industries. A good example is the American dominance of IBM and Xerox, the firm was challenged successfully by a Japanese copier company due to underserved product segment such as small copier, using a new approach to the consumers by using dealers instead of direct sales, mass production of goods and pricing approach was modified. This strategic approach reduced the entry barriers and had a negative implication on the previous leaders (American firm) advantages. Positioning within industries According to Porter, at the heart of positioning is competitive advantage therefore for multinational enterprise to achieve success, they must possess a sustainable competitive advantage the two types of competitive advantages by Porter are as follows: Lower cost: this means being able to design, produce and market similar product more efficiently than other competitors. For example the Korean steel and semiconductor firm was able to produce at a very low cost, using low-wage but highly productive labor force and a modernized process. Differentiation: the ability to maintain quality and unique and superior value to consumers. From: http://tutor2u.net/business/images/competitive_strategies.gif Competitive Advantage Creation Competitive advantage would be shifted by innovation if multinational enterprise fails to perceive a new way of competing or are not able to respond to competition. For e.g. the Swiss watch producers were unable to identify the competitive advantage of Timex an American company due to the fear of low quality production whereas the American Timex mass produced inexpensive disposable watch. Causes of competitive advantages are: New technologies: some multinational enterprises steeped in an old technological paradigm cannot cope with this New and shifting consumer needs: in order to meet the needs of consumers firms might need to adopt a new value chain which might be difficult for some firms. For example the American fast food firms were able to gain competitive advantage over local restaurants due to this. Shifting cost: firms may find it difficult to compete as cost of production changes. New entrant /new industry segment: Government regulation changes: government may change her regulation such as the standard required for each products. This might be a barrier for some firms to compete. Highlights of factors affecting multinational enterprises There are two major types of factors affecting multinational enterprise. Internal factors External factors Internal factors include: Political parties Suppliers Buyers Competitors Consumer of respective country External factors include: Political environment, Legal environment, Socio-cultural environment Demographic conditions of respective country FURTHER EXPLANATION ON THE PROBLEMS FACING MULTINATIONAL ENTERPRISE The supply chain of multinational companies can be made richer and promising, the cost of work force which is high could be changed or transformed and potential markets can be expanded. Furthermore, the advantage of multinational enterprise competition can be made stronger in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main parts, such as the following: Difference in culture Factors occurring in the environment Legal issues in environment Economic environment Political system issues All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. Cultural Competitive Advantage The norms and values of a country contribute to the cost and influence the cost of doing business in that country and likewise, the cost of doing business in a country enhances the strength of firms competitive advantage in an international market. For instance, the Hindu does not support capitalism as the ethics embedded in the Protestantism and the Confucianism furthermore, the Islamic laws disallowing interest payments mat raise the cost of doing business by constraining a countrys banking system. The example of Japans cultural influence of competitive advantage on international business cannot be over emphasized due to its ability to lower the cost of doing business such as group affiliation, loyalty, reciprocal obligations, honesty, and education which has contributed to the success of the countrys competitive advantage. In comparison of Japan and American firms, it has been argued that Japan is not in support of entrepreneur whereas the Americans are which has made it possible for the American firms to dominate companies that are in support of entrepreneurial activities such as biotechnology and computer software. Maintaining Economic Competitiveness Factor bestowal/benefaction As argued by Michael Porter, according to Heckscher-Ohlin theory, governments investment in education would go a long way to help the country by giving a good and proper education and skills to a larger population in the country. A good example is Japan, the secrete behind her success is the provision of quality education to a larger number of her population, which has tremendously maintained, contributed and helped her competitive advantage. Status of demand The status of home demand has a major role to play in the production of domestic products which enables firms to be innovative and aspire for quality. Japaneses quality camera production is due to the need for consumers demand. Complementing industries The existence of complementing industries would help the strength of its competitive advantage such as the Swedish steel industrys strong competitive advantage due to the production of fabricated steel like ball bearing and cutting tools. Adopted strategy, structure and firms rivals According to Michael Porter argument, the idea developed or employed by each country varies which might or might not help them maintain national economic competition. According to him, the Japanese and the German firms are being dominated by top engineers whereas in the USA, that with good financial background dominates the firms. He further argues that the USAs loss of power in the engineering dominated firms was due their adopted idea. Furthermore, rivals into the industry always bring about ways of improving production quality, cost reduction and innovative ideas which helps firms to compete internationally. Conclusion Michael Porter has very good competitive ideas which could help a firm to compete internationally. References: Richard M.S Wilson and Collingilligan A. (2007) Strategic marketing management, planning, implementation and control 3rd edition. Elsevier limited. Helen Deresky (2006) International Management, Managing Across Borders and Cultures. 5th Edition, USA: Pearson prentice hall. Jan Aart scholte (2000) Globalization, A Critical Introduction, 2nd Edition. Palgrave Macmillan. McGraw-Hill/, (2005) international business: competing in the Global marketplace 5th Edition. The McGraw-Hill/Irwin companies Inc. http://tutor2u.net/business/strategy/global-business-global-strategy.html 4th Jan 2010 http://i.investopedia.com/inv/articles/site/IndustryHandbook1x.gif 5th Jan 2010 http://www.oecd.org/dataoecd/56/36/1922428.pdf 9th Feb 2010 http://www.oppapers.com/essays/Discuss-Management-Problems-Facing-Multinational-Companies/120224 10th Feb 2010 http://tutor2u.net/business/images/competitive_strategies.gif 11th Feb 2010 http://www.articlealley.com/article_183485_22.html 13th Feb 2010

Literary Analysis Paper on Lord of the Flies Essay

Struggling for Power The novel Lord of the Flies can be a violent like story. All throughout the novel, William Golding does a good job of showing how Ralph and Jack quarrel between each other whether who should take charge and who will be the leader to keep things in order. William Golding uses the struggle for power to show the different sides of good and evil throughout the novel Lord of the Flies. The theme Struggle for Power plays a huge part between Ralph and Jack which causes them and the boys to act in savagely ways. The constant battle for power leads to a debacle in their group on the island. Struggle for power in the beginning of Lord of the Flies is mainly between Jack and Ralph. Golding demonstrates this when Jack says â€Å"I ought to be chief because, I’m chapter chorister and head boy,† (14). This shows that Jack is determined to be the leader no matter what everyone else says and therefore showing his character as being very controlling. As a result, the boys vote Ralph to be chief which makes him lead in a more reliable way. Now Ralph portrays a good example of a true leader. He demonstrates his brave and good leadership skills when he says â€Å"I’m chief. I’ll go. Don’t argue†¦You. Hide here. Wait for me† (114). This quote gives us a good example of the willingness Ralph is to protect his tribe and it also shows us the good leadership skills Ralph has. Jack is very determined to steal the leadership from Ralph and continues to do so throu ghout the novel. A specific event showing this is when Jack says â€Å"He’s not a hunter. He’d never got us meat. He isn’t perfect and we don’t know anything about him. See more: how to write an analysis paper on an article examples He just gives orders and expects people to obey him for nothing† (140). This quote gives a good indication of how Ralph and Jack go back and forth. Jack and Ralph both want different things, which cause them to disagree almost on everything. Now Jack’s cravings for power leads to misfortunes in their group when Jack says â€Å"Who thinks Ralph oughtn’t to be chief, hands up, whoever wants Ralph not to be chief?†(140). This quote shows us that Jack is  always in the constant need of power and how every chance he gets he is always trying to steal the power from Ralph. He gives us a good example of how demanding his character is and how he will not stop till he gets what he wants as chief. Jack gives a good example of using his demanding sense of power to try to gain control by continuing his battle with Ralph to gain power when Jack says â€Å"Listen all of you. Me and my hunters are living along the beach at the flat rock. We hunt and feast and have fun. If you want to join come and see us. Perhaps we’ll let you join. Perhaps not† (140). In this situation when jack was turned down to be chief the first time he walks off making his own tribe therefore leaving the denouement of the group damaged. Jack believes that the way things are being run by Ralph are not the way things he would run them and he should be the chief. When Jack decides to leave the rest of the group and go on to make his own tribe and own rules, he soon later realizes he has no way of making a fire so he goes back to tell them they can come over to their side for a feast. He then leads an attack to steel Piggy’s glasses which becomes clear when Ralph confronts Jack about the specs. After they stole the specs we see the true meaning of the rejection of rules when Ralph says â€Å"Now Piggy can’t see, and they came, stealing†¦and stole our fire. They stole it. We’d have given them fire if they’d asked. But they stole it and the signal’s out and we canà ¢â‚¬â„¢t even be rescued†¦We’d have given them fire for themselves only they stole it† (168). This quote gives us a good explanation of how the boys and their savagery and it also shows tells us that the need for power is no more because of Jack going his separate way with his own tribe. William Golding does a good job of not only giving you a in depth mental picture of what is going on between Jack and Ralph and their struggle for power but he also does a good job of giving a good picture of the novel as a whole. All throughout the novel Lord of the Flies, Ralph and Jack tussle as to whom should be chief of the island. Struggle for power plays an important role throughout the novel and William Golding gives us a good mental picture as to what is going on in the story. The need for power between Jack and Ralph continues throughout the novel and it also shows the different sides of the good and evil sides of what power can do to us.

Importance of Louisiana Purchase to America

Louisiana Purchase was a historical land purchase agreement signed between former America President Thomas Jefferson and French ruler Napoleon Bonaparte, which transferred the French territory of Louisiane to the American republic. France wanted the presence of a growing power- America, to give stiff resistance to the British, while America wanted to get rid of Spanish and French control in its trade route along the Mississippi river. It was evident that the Louisiana Purchase would have a strong social, economic and political importance to the American republic and its future.DiscussionLouisiana Purchase of 1803 transferred the land from erstwhile French possession to the contemporary American federation, and this piece of land now comprises fifteen American states, namely, Arkansas, Oklahoma, Missouri, Kansas, Iowa, and Nebraska, Minnesota, South Dakota, North Dakota, Montana, Wyoming, Colorado, New Mexico, Texas, and Louisiana (â€Å"The Louisiana Purchase, 1803†). When the se fifteen states were incorporated into the American union, the new amalgamation was, predominantly, a white majority union with white landowners, who used slaves for performing various occupations.In the early years of its formation, voting was reserved only for those who paid taxes, and only those while males having ownership of property could hold public offices (â€Å"The Louisiana Purchase, 1803†). With a large influx of immigrants to this region of maritime importance, a multicultural society was soon flourishing as different ethnic groups started settling there. Since the newly formed states from Louisiana Purchase were bordered along the Mississippi river, America got a free access to trade both within the country and to the continental Europe.This major political development boosted the economy of the American region. Moreover, the vast stretch of fertile land in the prairie states of North Dakota, South Dakota as well as Kansas, facilitated the growth of revenue fr om agriculture. Also, the inclusion of the state of Texas gave America a rich source of oilfields. In 1920, one of the Texan oilfields produced 50 million barrels (â€Å"Oilfields in Texas†). With a history of territorial wars, slavery, and gradual evolution of democracy, this amalgamation of fifteen states has given famous Presidents to the American republic.Some of the former American Presidents, namely, Bill Clinton, Herbert Hoover, Harry Truman, Gerald Ford, Dwight Eisenhower, Lyndon Johnson, and George Bush were born on the erstwhile land, which was acquired under the Louisiana Purchase agreement. Conclusion With the acquisition of land under the Louisiana Purchase accord, the American republic witnessed social, economic and political changes that impacted its development significantly.

The Literary Modernism Time Period - 1435 Words

The literary modernism time period was a movement in literature that started in the early 1890s and was very eventful. During this era there were many considerable events taking place such as The Great War (also known as â€Å"World War One†), which started in 1914. This War lasted for four years and finally ended in 1918, but its effects lasted much longer. The financial instability of Europe and death caused by this First World War gave people a sense of patriotism that unified them. It made people think of not only the society as a whole, but themselves as individuals (Modernism.). This new individualist mindset made people think more about their thoughts and actions than they had ever previously done before. Because individuals thought†¦show more content†¦When Laura becomes aware of this news, she immediately suggests calling off the party. Mrs. Sheridan, Laura’s mother, is repugnant against the idea of canceling the party. Jose also displeased with Lauraà ¢â‚¬â„¢s suggestion and says, â€Å"If youre going to stop a band playing every time some one has an accident, youll lead a very strenuous life†¦Ã¢â‚¬  (Short Stories). After that, despite Laura’s exhortative remarks for them to cancel the party, the previous planes still uphold. Towards the end of the party, Laura and her father converse about the deceased gentleman while eating some sandwiches. Laura decides to bring the leftovers to the widow of the recently departed man in a basket, and when she arrives she is invited in to the house. She does not want to go in but the widow insists and Laura is given no choice. When she goes in, she is brought to the body of the deceased and sees how carefree his face is. She contemplates the importance of everything that she once thought had importance and realizes that no one material thing truly mattered to him at this point. She begins to cry and runs out of the house, only after managing to utter, Forgive my hat,† (Shor t Stories). She then runs into Laurie who is outside, sent by their mother. He notices that she is crying, and she says, â€Å"Isnt life†¦ isn’t life—â€Å" (Short Stories). She did not complete her sentence but he understood what she was trying to say, and replied â€Å"Isnt it, darling?† (ShortShow MoreRelatedThe Birth Of The Realism And Modernism Era1322 Words   |  6 PagesEdith Wharton Literary History The birth of the Realism and Modernism era appeared during the late eighteenth century to early nineteenth century. Both Realism and Modernism are evident in many of Edith Wharton’s literary works. Realism came from chaotic times where it â€Å"encompasses the period of time from the Civil War†(Realism from American). 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