Fix and Paraphrase

Q1.

A. The industry in this case is the carbonated soft drink industry. (Porters 5Forces)

I. Threat of New Entry: The threat of any new entry would be reduced by such a vertical integration and consolidation. This is because of the fact that the industry is already dominated by the merged companies and Coca Cola and Pepsi. This is supported by the brand loyalty that the major players already have. They also have absolute cost advantage as compared to any potential new entrants. (Is there any government regulation)

II. Suppliers Power: In the carbonated soft drink industry, the suppliers are the people or companies that provided the concentrate producers with the caramel coloring, caffeine, natural flavors, and phosphoric or citric acid. They also offered the bottlers sweeteners and packaging. After the vertical integration and consolidation of the bottlers and the concentrate producers, the suppliers would have an increase in bargaining power. This is because of the increase of demand coming from the consolidated organization.

III. Buyers Power: Buyers will have more power because of the consolidation of the concentrate producers and bottlers. This is because of the availability of more retailers to sell to the end consumers. As a result, there would be a larger choice the end costumer can buy from.

IV. Threat of Substitution: The substitute will continue to be the same with the vertical integration and consolidation of the bottlers and concentrate producers. Examples of these substitutes are water, coffee, juice, peer etc.

(Give example of substitute)

V. Competitive Rivalry: Consolidation and vertical integration will reduce rivalry. This is because of the decrease in the fixed costs of the company. In addition, the bigger company will be strengthened as buyers lose the ability to buy from smaller companies. (Intensity of rivalry_ Do the firms compete on price)

B.

i. Complementors: it means there is other products not substitute and increase the utility of the firm product. This happened a lot in the tech industry. Second, industry life cycle analysis.

ii. Industry life cycle analysis: the model is not capable to adapt. The model just makes a presentation of the current time. It might be not able to reflect well within the long term. For example, in certain life the firm might have a high competition.

iii. Macroenvinroment: It is about factors that might affect the company’s ability to serve. First, global forces, For example, China is emerging market for the horse industry. Second, Political and legal forces. For example, the closure of horse slaughter in Canada, US and other countries. Third, Social forces. For example, people concern about horse slaughter. Fourth, demographic forces. For example, the movement from rural to urban environment. Fifth,Technological forces, For example, Online gambling, TV and mobile. Finally, Macroenvinroment forces. For example, 2008 recession.

iv. Firm distinctive competence: The model does not care about the effect of a given business’s core competencies on its ability to make profit. Rather, the model only assumes the structure of the industry as the main factor that determines its profits. As a result of that, this model is hard to apply to big companies that have interactions that have been accomplished from a range of businesses.

v. Uncertainty: there is uncertainty in the model. The conclusions we get from the application of these forces are often arguable. The problem with that any mistake with the conclusion might result poor understanding of the industry.

C. Two of porter’s five forces that have changed

Two of porter’s five forces that have changed are the intensity of rivalry among existing companies and the threat of subsidies. These two can be used to talk

about the change in the preference of consumers towards alternatives that are

healthier. First, increasing consumers’ consciousness has raised the threat of

substitute. Consumer now worried about sugar and became more into healthy

trends. For example, soda is losing popularity to healthier options such as water

and juice. This has led to the rise of companies which provide a healthier range

of product. It is also important to note that the substitutes as well as the soft

drinks are usually stocked in supermarket shelves in equal proportion. Second,

this is clear evidence of rivalry among existing companies. These companies

have been forced to adapt to the demand by consumers for healthier alternatives. This new environment has enabled smaller companies to gain a

sizable portion of the market share. Bigger companies have been forced to act

quickly and even purchase smaller companies in order to remain relevant. Thus,

the industry has become very attractive for new entrants.

Q2.

A. Definition

It is the strength that enable the company to create competitive advantages. It also allows a firm to differentiate itself from competitor. That leads to better margin which makes the firm outperform its competitors and attain sustainable competitive advantage. It can be seen by doing internal analysis such as using VRIO framework to know how unique is the firm’s resources and capabilities.

Weaknesses

1- the companies always have many resources and capabilities.

There is a lot of work involved to figure out these recourses and capabilities. It can be very time consuming and complicated especially for beginners. (ignore the external environment)

2- Having a good logic is required to do the VRIO framework.

There are very few experts in VRIO who have a good logicabout it. Most people are just familiar with the concept. This makes it very difficult to carry out in an organization with non- experts. If the person who doing it is not having a good logic, it means the company will have a wrong assumption about how unique is its resources and capabilities.

B.

The first resource is the good reputation. Levi’s has a good reputation because it is the inventor of jeans which gave the firm the first mover advantage. The second recourse is the R&D. Levi’s has Curve ID system which help providing jeans that are flatter for its female costumers.

It is worthy to apply VRIO and Value Chain Analysis in order to find out if these two resources may be a source to sustained competitive advantage. In regards to the VRIO framework. Both of above resources are valuable because they both help the firm to increase the price and decrease the cost. Also, they are rare because it is hard for other firms to possess the same as these resources. In addition, these resources are costly to imitate.

Competitors may require increased investments in order to meet the standard that Levi’s has. Finally, the company’s leadership helps to attain a good reputation and great R&D. Also, the company has build its culture in a way that it is hard for other firms to imitate.

(explain specifically what the cost is for competition by mentioning the

competitor and the precise reason for the competitor)

In conclusion, these recourses are source of the firm’s sustainable competitive advantage.

In regards to the Value Chain Analysis, here is a diagram to describe it

(Compare Levi’s to rivalry such as TR)

The design is important for the firm and it provides a high value firm’s costumers. However, it costs the firm a lot because the firm needs to have good designers which is very expensive. Also, the company cares about the manufacturing because the firm wants to provide a high quality to its costumer. This costs the company a lot because there are materials, such as cotton, and high tech involved here. Furthermore, in general, they company focus less on the other value chains and it costs the firm less too.

C. ways in which Seven All Mankind may achieve sustainable competitive advantage.

There are various ways in which Seven All Mankind may achieve sustainable competitive advantage. The company should ensure that it produces products that may be consumed by a relatively larger market. This means that its products should be able to attract all consumers through providing products with fair prices. Further, the company should improve on its consumer relations. For example, the company should provide a website I which all consumer needs may be addressed.

Consumers usually have different forms of needs and responses to the company’s products and services, which may be significant in improving the company’s effectiveness. In regards to products, they can come up with new product area. For example, outwear on young. Also, knitwear or outwear with denim. In addition, the firm can attract more costumers by offering new lifestyle contemporary. Also, they can try to continue sales through out season by trading on season that out of slow into bestseller. In regards to the consumers, the firm can increase its staffing of Contemporary and also Denim. The firm can also collaborate more by for example beauty or maybe nail brand. Furthermore, the firm can provide visual drama more to its costumers. (connect these reasons to the VRIO which are Value, Rare, Inimitability, and Organized)

Q 3.

They are Logos, Ethos and Pathos.

1- Logos is about persuading the audiences by using logical reasons. For example, the CEO provides some facts and numbers to his audience.

2- Ethos is an appeal to ethic which means making the audiences convince. For example, the CEO would show the audience that he is worth to listen to.

3- Pathos is about the emotional appeal which means persuading the audiences by attracting their emotions to appeal sympathy from the audience. For example, the CEO use to make the audiences feel what he wants him to feel.