Buying one brand of shampoo instead of another, for instance, is quite common. Rivalry, therefore, is high.

Porter's value chain

Porter shows how firms such as Procter & Gamble can create competitive advantages for themselves. He categorizes a company's activities in the following way:

1. Primary activities: (a) Inbound logistics -- receiving the incoming material, including the handling and inventory of their material; (2) operations -- P&G's suppliers forming this material into their products; (3) Outbound logistics -- getting their products on their shelves and to the shelves of the different private stores and from thence to the customers; (5) marketing and sales -- P&G doing research on customer needs, satisfying their needs, communicating with consumers; (6) service -- fulfilling customers' needs after service has been completed, following up, and occasionally replacing products if need be. Research too is ongoing in order to discover future trends and ways to best...
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