aluminum suppliers; Alcoa, Alcan and Reynolds Metal. Aluminum is classic oligopoly dominated by Alcan and Alcoa. Reynolds may benefit from R&D synergies. Also there is a threat of forward integration. =>High l Threat of new entrants It seems that barriers to entry are low. Product differentiation and switching cost is not that high. Capital costs for three-piece can product lines are relatively low but capital costs for a two-piece can line is $20-25 million. =>moderate l Substitute There are
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the current members of the industry ← Includes imports from firms seeking economies of scale ← If it is easy to enter the industry this will tend to force industry prices down ← Threat depends on the height of barriers to entry ← Examples of entry barriers: ← Economies of scale - entrant must either enter on a large scale or accept a cost disadvantage ← Differentiation - brand identification and customer loyalty has to be overcome ← Capital requirements - how much
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new entrants, the metal container industry does not seem to be attractive due to the high barriers to entry. Most of all, the economies of scale provide current players with economic advantages that would be extremely difficult to reach for new entrants. Additionally, the saturation of the market does not make it very attractive to new entrants, as competition for current sales is so intense. The high barriers to entry are, however, an advantage for current producers, which do not have to be scared
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- Create the ‘missing’ piece of the jigsaw, connecting Greenwich Peninsula to Woolwich town centre - Transform the image of Charlton and to introduce a sustainable mix of uses in a high quality environment focussed around an enhanced Thames Barrier Park - Contribute towards the development of the Thames Gateway as a great place to invest, live and work - Connect into the transport network - Embrace smart industry to draw greater value from employment land - Develop a creative hub to diversify
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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
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1. What is Groupon and how does it work? What is Groupon’s market? What does this company do and how does it make money? Groupon is a deal-of-the-day recommendation service for consumers. Every 24 hours, Groupon broadcasts an electronic coupon for a specific service while also offering you a 50% to 90% discount if you purchase that service as long as and Groupon has a minimum number of purchasers The Groupon’s typical customers are young, well-educated, single, urban female, employed with significant
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market share, and substantial resources, they are therefore, threats to an established corporation. The threat of entry depends on the presence of entry barriers and the reaction that can be expected from existing competitors. Entry barrier is an obstruction that makes it difficult for a company to enter an industry. Some possible barriers to entry are: * Economic of Scale * Product Differentiation * Capital Requirements * Switching Costs * Access to Distribution Channels
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“The Competitive Effects of Advertising in the US Automobile Industry, - Greuner, Kamerschen and Klein “Organizational or Frictional Equilibria, X-Efficiency, and the Rate of Innovation.” The Quarterly Journal of Economics Leibenstein “X-Inefficiency Xists-Reply to an Xorcist” American Economic Review Leibenstein Introduction paper 1: Is advertising anticompetitive? Some economists argue that advertising performs a useful social function by providing consumers with information about price
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Zara Case Study Zara is a clothing and accessories retailer owned by Inditex of Spain. It is the largest and most internationalized of Inditex's chains. Zara completed its rollout in the Spanish market by 1990 and then started its expansion around that time. At the end of 2001, it operated 507 stores in countries around the world, including Spain. Zara has three product lines which are for women, men, and children, and two basic collections each year that are phased in through the fall/winter and
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Subject Code ECON90015 Subject Name Examining the Australian Supermarket Industry under Porter’s Five-Force Model comprising of: 1. 2. 3. 4. 5. Internal Rivalry Entry Substitutes and Complements Supplier Power Buyer Power And their impact on the profitability and welfare of different stakeholders in the market. In the big bad world of inflation, “Cheap Cheap” and “Everyday lower prices” have been the only words of solace. For the past 3 generations, Australians have
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