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Autor:   •  February 22, 2017  •  Term Paper  •  5,784 Words (24 Pages)  •  915 Views

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STRATEGIC PROFITABILITY MANAGEMENT

Answers by Gunasekaran Ramakrishnan

PGXPM12 – PGXPM152GUN

Question 1: Write a report to strategically fix all these problems with clear execution and implementation steps so that the organization is managed effectively and efficiently for excellence and regains profitability and high morale. You may also use all or most of the topics discussed and the 10 key takeaways.

Answer.

  1. Intense Competition from Local Competitor:

As an important person in the cross functional team, need to examine the positive factors of the competitor to be identified, First we need to study the important factors of competitor’s method on pricing, advantage and strategy in the market.

Pricing Method:

One should identify the Competitor’s pricing method, whether they are offering 10 units with 10% of profit margin or they are offering 20 units with 5% of the profit margin. Also, need to find out whether this strategy is long term or short term and How the competitors pricing method allows them to provide cheaper products with current demand conditions, what is their bench marking method.

 

Sales

No of units

10

20

Profit Margin

10$

5$

Gross Profit

100$

100$

Apart from above, the best strategy to beat the competitor in terms of pricing is to avoid the pricing war. One should add the value to the product and choose the value based pricing method for the customer since the pricing is considered as feature, not a benefit.

Competitors Advantage:

A SWOT analysis is a valuable input into identifying and prioritising strategic priorities and comparative data approach. SWOT analysis of our business, which with our strength, weakness, Opportunities and Strength can be worked out. This analysis assess the advantage of our company as well as helps to identify the competitor’s advantage. How well the competitor is performing in competing environment and how the business environment allows them to do better than our product

Strengths

Weaknesses

Opportunities

Threats

Internal

Reputation in marketplace

Higher Cost

Well established and designed role in the market

Large players operating at a minor level

External

High Reputation in the Market

Unable to deal with small level players

Identified market for product in areas other than current model

Other small players looking to invade the marketplace

Competitors Strategy:

It is no matter which industry we belong to, there will be heavy competition in every Industry. Every competitor’s strategy will be better quality, lower prices and unique features of the product, we need to evaluate our strategy to fight against them and establish defensive marketing strategy to face the intense competition. One should respond according to the competitor’s strength, the key take away from strategy is Cost leadership, Alliance, Innovation and Product differentiation.

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