...Kampala International University Abdifatah Adan Egeh Course work material +256718275925 caloolgeele@hotmail.com Introduction The analysis of barriers to entry and exit is fundamental to the assessment of market power and market efficiency. A firm or firms may exercise market power for a significant period of time only if barriers to new entry exist. Thus in determining whether or not a proposed merger is against the public interest, or whether a firm (or firms) is abusing monopoly or market power in antitrust cases, analysis of entry conditions is of primary importance. One might therefore expect to see rather extensive and sophisticated analyses of entry conditions, or barriers to entry, in monopoly and merger cases that come before competition authorities in the United States, United Kingdom, or member states of the European Union (EU). One might also expect that competition authorities would have placed a great deal of emphasis and effort on achieving a coherent and consistent framework for the analysis of entry barriers in a manner that makes use of the latest thinking on the subject by industrial organization economists. However, until very recently no competition authority that we are aware of has attempted to formulate a coherent and detailed framework for the analysis of barriers to entry, despite the significant degree of effort that has been put into clarifying the related problems of market definition and the measurement of monopoly or market power....
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...Entry/Exit Demand Analysis [ to cite ]: Peter R. Dickson and Alan G. Sawyer (1984) ,"Entry/Exit Demand Analysis", in NA - Advances in Consumer Research Volume 11, eds. Thomas C. Kinnear, Provo, UT : Association for Consumer Research, Pages: 617-622. Advances in Consumer Research Volume 11, 1984 ENTRY/EXIT DEMAND ANALYSIS Peter R. Dickson, The Ohio State University Alan G. Sawyer, The Ohio State University ABSTRACT Past methods of measuring consumer response to the price of a branded good are reviewed and critiqued. A new approach- Entry/Exit Demand Analysis--is described. The method borrows from and improves past methods. Some initial evidence about the technique's test-retest reliability is presented. INTRODUCTION One of the most troublesome problems that confronts management is estimating the responsiveness of demand to changes in price. In the past, experienced managers may have been able to intuitively assess price elasticity based on a history of strategic price increases and decreases. However, over the last decade, many of the street-wise managers may have lost their touch because consumer demand has become much more volatile. Inflation, recession and cultural trends are three factors that have made the tracking of demand curves and price elasticity an even more elusive exercise. Inflation has changed the real purchasing power of the dollar and consequently required consumers to frequently change their reactions to price. Consumers have to adjust to both changes in...
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...How do exit and entry barriers affect internal rivalry? a. Entry barriers: When new firms join an industry, it hurts the other firms that where there before by cutting into their market share and by intensifying internal rivalry, which ultimately leads to a decline in price cost margin. In essence, anytime a firm joins, the rest of them lose, to some degree, market share and revenue. The entry barrier becomes a factor that helps to understand how many firms are competing against each other. The lower the entry barrier, the more new firms present in the market and the more fronts of competition to attack (in order to gain market share and increase revenue). The higher the entry barrier, the less new firms present in the market, but still they are fronts to attack. b. Exit barriers: High exit barriers place a high cost on abandoning the product. This type of barrier causes a firm to remain in an industry, even when the venture is no longer profitable. If the industry’s fixed costs are high, competitive rivalry will be intense. A common exit barrier is asset specificity. When the plant and equipment required for manufacturing a product is highly specialized, these assets cannot easily be sold to other buyers in another industry. Low exit barriers would reduce the number of competitors a firm is competing against, which means that it increases the opportunity of gaining more market share and revenue, by capturing what others left when they exit the market. In conclusion...
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...|Add New Courses | |Participating actors |University administrator | |Entry condition |Administrator provides user name and password to login | |Flow of Events |Login | | |University administrator adds new | | |colleges. | |Exit condition | Successfully Adds new courses and then | | |logout or proceed to next level. | |Use case name |Add New Colleges | |Participating actors |University administrator | |Entry condition |Administrator provides user name and password to login | |Flow of Events |University...
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...CASE #1 – The Marketing ProcessYou are to write a 5-8 page report that answers the following: 1. An orthopedic group practice has decided to develop a pediatric sports medicine program. Describe at least three potential markets for this new service. 2. Describe the possible barriers to entry and exit for a physician wanting to establish a solo practice in internal medicine. 3. Describe the possible barriers to entry and exit for a company offering a health club facility in the same building where employees work. 4. Describe the possible barriers to entry and exit for a tertiary hospital developing a coronary bypass program. 5. Assume you are hired to design a managed care organization (MCO) plan targeted to baby boomers in San Antonio, Texas, a city with a large Hispanic population. Describe at least three ways that the MCO can make this service offering unique to respond to the major demographic trends of today.The format of the report is to be as follows: * Typed, double spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format. * Type the question followed by your answer to the question. * In addition to the 5-8 pages required, a title page is to be included. The title page is to contain the title of the assignment, your name, the instructor’s name, the course title, and the date.NOTE: You will be graded on the quality of your answers, the logic/organization of the report, your language skills, and your writing skills. | The assignment...
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...Entrance/Lobby – Electronic Lock (24 Hour Attended Security Desk) * Exterior – Card Reader With Time Recorder, Camera With Intercom, Camera Pan/Tilt/Zoom With Recorder 24 Hour * Interior – Push Button Exit Design Center Main Entry Doors – Electronic Lock * Exterior – Card Reader * Interior – Push Button Exit 1st Floor Data Room – Electronic Lock * Exterior – Card Reader With Key Pad * Interior – Push Button Exit Secondary Exits – Electronic Locks * Camera With Recorder 24 Hour * Emergency Exit Device Alarmed Elevator – Card Reader For Hallway Call Button Control Stairwell – Card Reader For Hi-Tower Locking System Second Floor HR & Payroll Department Main Entry Doors – Electronic Lock * Exterior – Card Reader * Interior – Push Button Exit 2nd Floor Data Room – Electronic Lock * Exterior – Card Reader With Key Pad * Interior – Push Button Exit Third Floor AP & AR Department Main Entry Doors – Electronic Lock * Exterior – Card Reader * Interior – Push Button Exit 3rd Floor Data Room – Electronic Lock * Exterior – Card Reader With Key Pad * Interior – Push Button Exit Third Floor Executive Offices Main Entry Doors – Electronic Lock * Exterior – Card Reader * Interior – Push Button Exit 4th Floor Data Room – Electronic Lock * Exterior – Card Reader With Key Pad * Interior –...
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...Entry and Exit Entrants threaten incumbents in two ways: First, they take market share away from incumbents. Second, entry often intensifies competition, leading to lower prices. This is a natural consequence of the Cournot and differentiated Bertrand models in which more firms imply lower prices. Some Facts about Entry and Exit There are three important implications for strategy: 1. When planning for the future, the managers must account for entry. 2. Managers should expect most new ventures to fail quickly. 3. Managers should know the entry and exit conditions of their industry. Entry and Exit Decisions: Basic Concepts The entrant must sink some capital that cannot be fully recovered upon exit – it is this element of risk that makes the entry decision difficult. The entrant hopes that postentry profits exceed the sunk entry costs. There are many potential sunk costs to enter the market such as specialized capital equipment to government licenses. The potential entrant may use many different types of information about incumbents, including pricing practices, costs and capacity to assess why postentry competition may be like. Barriers to Entry Structural entry barriers exists when the incumbent has natural cost of marketing advantages, or when the incumbent benefits from favorable regulations. Strategic entry barriers result when the incumbent takes aggressive actions to deter entry. Bain’s Typology of Entry Conditions * Blockaded...
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...created by Michael E. Porter and described in the book “Competitive Strategy: Techniques for Analyzing Industries and Competitors,” has proven to be a useful tool for both business and marketing-based planning. Background The pure competition model does not present a viable tool to assess an industry. Porter’s Five Forces attempts to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry. This model may be used as a tool to better develop a strategic advantage over competing firms within an industry in a competitive and healthy environment. It identifies five forces that determine the long-run profitability of a market or market segment. * Suppliers * Buyers * Entry/Exit Barriers * Substitutes * Rivalry Supplier power * Supplier concentration * Importance of volume to supplier * Differentiation of inputs * Impact of inputs on cost or differentiation * Switching costs of firms in the industry * Presence of substitute inputs * Threat of forward integration * Cost relative to total purchases in industry Buyer power * Bargaining leverage * Buyer volume * Buyer information * Brand identity * Price sensitivity * Threat of backward integration * Product differentiation * Buyer concentration vs. industry * Substitutes available * Buyers’ incentives...
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...Market structures are traditionally distinguished between four types i.e. perfect competition, monopoly, monopolistic competition and an oligopoly. They are determined on the basis of the number of firms in the market, the type of product, whether homogenous or differentiated and whether barriers to entry exist or not. Due to various specifications of all structures a “casual chain” is seen running from the market structure to the performance of that industry (Sloman, J. Hinde, K. pp 222) A monopoly involves one firm producing a good without close substitutes; that coincides with the firm. Barriers to entry exist thus making it difficult for new entrants to penetrate the industry and be a threat. The concept of the monopoly is relative since it crucially depends on how broadly or narrowly the product and the market are defined as. A monopoly firm can set the price as it is a price setter thus it has a certain degree of monopoly power that is determined by the difference between price charged and marginal cost expressed as a proportion of price. Monopolists can choose either the price or the level of output, but not both as it still faces a negatively sloped demand curve. Thus the monopoly firm does not have a supply curve. (Sloman, J. Hinde, K. 2007) For the monopoly firm to make supernormal profits it has to be a profit-maximizing firm. Therefore the firm shall not choose a rate of output Q that corresponds to the price inelastic segment of the demand curve. It will locate...
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...Children that have been injured while playing recreational or school sports, is a target market that is easily accessible by pediatric sports medicine providers. Having a school or recreational department provide a list and referral of students who have been injured within the last 90 days and need appropriate treatment for an injury. Lastly, parents of children who make les than $60,000 per year or with adequate insurance coverage will identify the geographic area that this pediatric sports clinic will need. Limiting the income requirement will insure that all children who need the service are able to receive them either with insurance coverage or have their parents pay the out-of-pocket expense. Describe the possible barriers to entry and exit for a physician wanting to establish a solo practice in...
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...******************** ********************************** Term Paper On discipline “Microprocessor Systems” Done by ***** Student of ******** Checked by ********* Task Design MP System, based on single-chip 8-bit microprocessor KR580VM80AOA with the following characteristics: 1. CPU: KR580VM80A0A. 2. RAM: 24 KBytes 3. ROM: 40 KBytes 4. Controlling for parity. 5. Number of digital inputs: 8. 6. Number of digital outputs: 8. 7. Interrupt controller, with a fixed order of service. 8. DMA channel. 9. Serial channel. 10. Timer / counter. Content Introduction 1. The description of applied elements 2.1 Microprocessor KR580VM80A 2.2 Oscillator of clock pulses KP580ГФ2 2.3 Control unit of interruptions KP580BH5 2.4 System control unit KR580VK28 2.5 Programmed consecutive interface KR580VV51 2.6 Control unit of the keyboard and display KR580VV79 2.7 Microcircuit of random-access memory K537PУ17 2.8 Microcircuit of ROM K573PФ6 2.9 Microcircuit of decoder K155ID3 2.10 Microcircuit K514ИД2 2.11 Buffer register 1533АП5 2. Calculation part 3.12 Calculation and planning of address space of memory 3.13 Construction of circuit designs of decoding of addresses of memory 3.14 Calculation and planning address for input-output devices 3.15 Construction of circuit designs of decoding of...
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...An orthopedic group practice has decided to develop a pediatric sports medicine program. Describe at least three potential markets for this new service. Response: One potential market to develop a pediatric sports medicine program would be in a community that has a large concentration of inner city middle and high schools with several athletic programs. Often times when children have sports related injuries their parents or guardians resort to emergency rooms, urgent care facilities, or their regular pediatrician. These visits sometimes lead to a referral to an orthopedic specialist. Some times these groups are not easily accessible for families, especially those in the inner city. For instance, Campbell Clinic in Memphis, TN is a major orthopedic group. However, it is located in a sub-urban area and is not very close to the more urban areas of the city. Another target group to market would be the school boards in general. As it stands, within Shelby County as a whole there is a Memphis City School (MCS) Board and a Shelby County School Board. Incorporating a pediatric sports medicine program within the school systems could be a great idea. In speaking with a friend that is employed with MCS, the health field within the school board is expanding with hiring of school psychologists and school nurses. A third potential market could be a pediatric medical group that offers several specialties. An example could be the University of Tennessee Medical Group (UTMG), which offers...
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...Chapter 9: Global Market Entry Strategies The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions will heavily influence the firm’s other marketing-mix decisions. Global marketers have to make a multitude of decisions regarding the entry mode, which may include: * (1) The target product/market * (2) The goals of the target markets * (3) The mode of entry * (4) The time of entry * (5) A marketing-mix plan * (6) A control system to check the performance in the entered markets 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 2. Choosing the Mode of Entry Decision Criteria for Mode of Entry: * Market Size and Growth * Risk * Government Regulations * Competitive Environment/Cultural Distance * Local Infrastructure Classification of Markets: * Platform Countries (Singapore & Hong Kong) * Emerging Countries (Vietnam & the Philippines) * Growth Countries (China & India) * Maturing and established countries (examples: South Korea, Taiwan & Japan) Key criteria for choosing entry modes: * Company Objectives ...
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...maximization. Firms exit the industry if they fail to pass the survival test of making nonnegative wealth. Industry converges in probability to the monopolistically competitive equilibrium as the size of each firm becomes small relative to the market, as the entry cost becomes sufficiently small, and as time gets sufficiently large. Consequently, in the limit, the only surviving firms are those producing at the tangency of the demand curve to the average cost curve and no potential entrant can make a positive profit by entry. Introduction The criterion by which the economic system selects survivors: those who realize profits are the survivors; those who suffer losses disappear. In the late 1920s and early 1930s it became apparent that there were severe limitations in conducting economic analysis using a framework of either pure competition or pure monopoly. Consequently, economists began shifting their attention to middle ground between monopoly and perfect competition. One of the most notable achievements was Chamberlin’s, 1933 blending of elements of perfect competition and pure monopoly in a notion of ‘‘large group’’ monopolistic competition where there are many competing firms producing similar but different commodities which are not perfect substitutes. Because of the product differentiation each firm has a certain degree of monopoly power (i.e., faces a downward-sloping demand curve). The presence of a product group with free entry leads the industry to...
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...developed a framework that helps managers in this analysis. Porter’s framework, known as the five forces model focuses on five forces that shape competition within an industry: (1) the risk of new entry by potential competitors, (2) the degree of rivalry among established companies within an industry, (3) the bargaining power of buyers, (4) the bargaining power of suppliers, and (5) the closeness of substitutes to an industry’s products. A. Potential Competitors Established companies try to discourage potential competitors from entering, since the more companies enter an industry, the more difficult it becomes for established companies to hold their share of the marker and to generate profits. Thus a high risk of entry by potential competitors represents a threat to the profitability of established companies. On the other hand, if the risk of new entry is low, established companies can take advantage of this opportunity to rise prices and earn greater returns. The strength of the competitive force of potential rivals is largely a function of the height of barriers to entry. The concept of barriers to entry implies that there are significant costs to joining an industry. The greater the costs that potential competitors must bear, the greater are the barriers to entry. High entry barriers keep potential competitors out of an industry, even when industry returns are...
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