Q1 Michael Porter identified three sources of competitive advantage.

Discuss those
sources.
Competitive advantage is a set of circumstances or conditions (such as being first to
take a product to market) that puts one company in a more favorable position than the
other. 

Cost Leadership

Cost leadership means companies provide reasonable value at a lower price. Firms do

this by continuously improving operational efficiency. That usually means paying their
workers less. Some compensate for lower wages by offering intangible benefits such
as stock options, benefits, or promotional opportunities.

Differentiation

Differentiation means companies deliver better benefits than anyone else. A firm can
achieve differentiation by providing a unique or high-quality product. Another method is
to deliver it faster. A third is to market in a way that reaches customers better.

A company with a differentiation strategy can charge a premium price, which means it
usually has a higher profit margin.

Cost Focus

Focus means the company's leaders understand and service their target market better
than anyone else. They either use cost leadership or differentiation to do that. The key
to a successful focus strategy is to choose a very specific target market. Often it's a tiny
niche that larger companies don't serve.

For example, community banks use a focus strategy to gain sustainable competitive

advantage. They target local small businesses or high net worth individuals. Their target
audience enjoys the personal touch that big banks may not be able to give, and
customers are willing to pay a little more in fees for this service. These banks are using
a differentiation form of the focus strategy.

Q2. Explain stages in new product development process.

New product development is the process of bringing an original product idea to market.
Although it differs by industry

Here's how to develop your own original product idea and what to consider at each
stage.
Stage 1: Generating New Product Ideas

Generating new product ideas is a creative task that requires a particular way of

thinking. Coming up with ideas is easy, but generating good ideas is another story.
Companies use a range of internal and external sources to identify new product ideas.
A SWOT analysis might suggest strengths in existing products that could be the basis
for new products or market opportunities. Research might identify market and customer
trends. A competitive analysis might expose a hole in the company’s product portfolio.
Customer focus groups or the sales team might identify unmet customer needs.
Many amazing products are also the result of lucky mistakes—product experiments that
don’t meet the intended goal but have an unintended and interesting application. For
example, 3M scientist Dr. Spencer Silver invented Post-It Notes in a failed experiment
to create a super-strong adhesive.

The key to the idea generation stage is to explore possibilities, knowing that most will
not result in products that go to market.

Stage 2: Screening Product Ideas

The second stage of the product development process is idea screening. This is the first
of many screening points. At this early stage much is not known about the product and
its market opportunity. Still, product ideas that do not meet the organization’s overall
objectives should be rejected at this stage. If a poor product idea is allowed to pass the
screening stage, it wastes effort and money in later stages until it is abandoned. Even
more serious is the possibility of screening out a worthwhile idea and missing a
significant market opportunity. For this reason, this early screening stage allows many
ideas to move forward that may not eventually go to market.

At this early stage, product ideas may simply be screened through some sort of internal
rating process. Employees might rate the product ideas according to a set of criteria, for
example; those with low scores are dropped and only the highest ranked products move
forward.

Stage 3: Concept Development and Testing

Today, it is increasingly common for companies to run some small concept test in a real
marketing setting. The product concept is a synthesis or a description of a product idea
that reflects the core element of the proposed product. Marketing tries to have the most
accurate and detailed product concept possible in order to get accurate reactions from
target buyers. Those reactions can then be used to inform the final product, the
marketing mix, and the business analysis.
New tools leveraging technology for product development are available that support the
rapid development of prototypes which can be tested with potential buyers. When
concept testing can include an actual product prototype, the early test results are much
more reliable. Concept testing helps companies avoid investing in bad ideas and at the
same time helps them catch and keep outstanding product ideas. 
Stage 4: Business Case Analysis

Before companies make a significant investment in a product’s development, they need

to be sure that it will bring a sufficient return.

The company seeks to answer such questions as the following:

1. What is the market opportunity for this product?

2. What are the costs to bring the product to market?
3. What are the costs through the stages of the product life cycle?
4. Where does the product fit in the product portfolio and how will it impact existing
product sales?
5. How does this product impact the brand?
6. How does this product impact other corporate objectives such as social
responsibility?

The marketing budget and costs are one element of the business analysis, but the full
scope of the analysis includes all revenues, costs, and other business impacts of the
product.

Stage 5: Technical and Marketing Development

A product that has passed the screening and business analysis stages is ready for
technical and marketing development. Technical development processes vary greatly
according to the type of product. For a product with a complex manufacturing process,
there is a lab phase to create specifications and an equally complex phase to develop
the manufacturing process. For a service offering, there may be new processes
requiring new employee skills or the delivery of new equipment. These are only two of
many possible examples, but in every case the company must define both what the
product is and how it will be delivered to many buyers.

While the technical development is under way, the marketing department is testing the
early product with target customers to find the best possible marketing mix. Ideally,
marketing uses product prototypes or early production models to understand and
capture customer responses and to identify how best to present the product to the
market. Through this process, product marketing must prepare a complete marketing
plan—one that starts with a statement of objectives and ends with a coherent picture
of product distribution, promotion, and pricing integrated into a plan of marketing action.
Stage 6: Test Marketing and Validation

Test marketing is the final stage before commercialization; the objective is to test all the
variables in the marketing plan including elements of the product. Test marketing
represents an actual launching of the total marketing program, done on a limited basis.

Initial product testing and test marketing are not the same. Product testing is totally
initiated by the producer: he or she selects the sample of people, provides the
consumer with the test product, and offers the consumer some sort of incentive to
participate.

Test marketing, on the other hand, is distinguished by the fact that the test
group represents the full market, the consumer must make a purchase decision and pay
for the product, and the test product must compete with the existing products in the
actual marketing environment. For these and other reasons, a market test is an
accurate simulation of the broader market and serves as a method for reducing risk. It
should enhance the new product’s probability of success and allow for final adjustment
in the marketing mix before the product is introduced on a large scale.

Stage 7: Launch

Finally, the product arrives at the commercial launch stage. The marketing mix comes
together to introduce the product to the market. This stage marks the beginning of the
product life cycle.

Stage 8: Evaluation

The launch does not in any way signal the end of the marketing role for the product. To
the contrary, after launch the marketer finally has real market data about how the
product performs in the wild, outside the test environment. These market data initiate a
new cycle of idea generation about improvements and adjustments that can be made to
all elements of the marketing mix.

Q3. In detail discuss key components in achieving corporate success.

Business success takes many different elements combining together to create just the
right mix of vision, purpose, product and customer satisfaction. While there are many
factors that businesses cite as being essential to creating success, here are five that
must be on every organization’s list.

1 Vision: Senior management and other stakeholders must establish an overall vision of
what the corporation should be. This defines the basic need they fulfill and establishes the
generic direction of the business.

2 Corporate objectives and strategy: Collective goals and strategy define the ‘benchmarks’
for success, and ways of achieving success. This level co-ordinates corporate activity and
initiate activities to achieve desired results.

3 SBU/functional objectives and strategy: Corporate strategy translates into objectives and
plans for individual elements of the business. This may take the form of SBUs’ (divisions
within a company) or functional activities.

4. Resources: For a given strategy, the need exists to match resources to

strategic intent. This process normally involves annual budgeting.

5. Structure: Management must develop the appropriate organizational and

staffing structures to facilitate success.