London Drugs Case Study

LONDON DRUGS CASE

1 Sustainable Competitive Advantage

1. According to the textbook organizations can gain competitive advantage by promoting their consumers greater value than the competition can.

1. The competitive advantage of the company is the convenience, is to allow the consumer to find articles from different segments in the same place. When the consumers enter a store, they can buy everything they would find in a pharmacy and other products such as household goods and technology products.

1. The four conditions that must be met are:

• Valuable Resources
• Rare Resources
• Imperfectly Imitable Resources
• Non-substitutable Resources

1. As said before, the company offers a vast mix of products and if we are to classify the products according to the conditions, we would find at least one product for each of them. From my point of view, if we are to classify the service, we may qualify as valuable and rare, since a store with such variety is not common. As the article itself says, it is not a recipe for success, but it worked.

2 Porter’s Five Forces

1. According to the textbook it is “a measure of the intensity of competitive behaviour between companies in an industry”.

1. By having a different business model, the company does not find competition with the same offer but competes with different industries. Being a very large network and making large-scale purchases, I believe that bargaining power is in its hands and not in the hands of suppliers. The threat of new entrants is softened by the loyalty of their consumers.

1. In SWOT analysis, character of rivalry is one of the factors of external environment threats.

1. As a larger company with global reach, Walmart has more bargaining power over suppliers. In this way, it can offer products with better prices.

3 Positioning Strategy

1. According to the textbook, it is “to protect your company from the negative effects of industry-wide competition ant to create a sustainable competitive advantage”.

1. Cost leadership - means offering a product or service with quality comparable to the competitor and with a lower price.

Differentiation - means that your product or service is sufficiently different from the competitor, so that the consumer agrees to pay more for it.

Focus strategy - The company uses any of the other two strategies to meet the demand of a limited group of consumers.

1. I believe that the company uses the cost leadership strategy, since it sells all its products with competitive price in relation to competition.

1. In relation to Walmart the company uses the strategy of differentiation. This strategy is shown through the great focus on the consumer and the satisfaction of the same. So, it is one of the most loved brands.

4 SWOT

1. The SWOT analysis determines the opportunities and threats of the external environment and the strengths and weaknesses of the internal environment.

1. The environments do not have a hierarchy, in order to determine the strategy it is important to combine all the points of the SWOT analysis.

1. Forces - Knowledge of its staff and the differentiated treatment for each department.

Weaknesses - Cost of maintaining a physical store

1. Opportunities - Growing demand

Threats - Big competitors such as Walmart

5 Adaptive Strategies

1. The purpose is to minimize the effects of competition and build a sustainable competitive advantage.

1. Defenders - seek moderate and steady growth and offer a limited mix of products or services to a well-defined group of consumers.

Prospectors - seek fast growth and new market opportunities, are known to take risk and be innovative.

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