by concentrated rivalry and diffuse rivalry o Greater the industry concentration, the lower the competition between rivals, thus the more profitable the firms will be • Threat of new entrants o How easily can new firms enter market? o Are there entry barriers? o Do existing rivals have competitive advantage making it difficult for other firms to enter and compete? • If so, firms in industry will likely generate higher profits than if new entrants can enter easily. • Threat of substitutes o
Words: 827 - Pages: 4
Chapter 3- Analyzing the External Environment Discussion Questions: Question Number Answer: 1) To identify opportunities and threats is an important reason why firms study their external environment- general, industry and competitor. Opportunities are conditions in a firm’s external environment that enables the firm to use its core competencies to achieve its vision. Threats are conditions in a firm’s external environments that prevent the firm from successfully using its core competencies. Firms
Words: 1422 - Pages: 6
efficient scales of production. 2. The competitive structure of the brewing industry using Porter’s five forces model. a. Risk of entry by potential competitors. New micro brewing companies have low barriers of entry. New micro brewing companies do not rely heavily on brand loyalty or economies of scale. Mass market brewers our faced with higher barriers to entry because of brand loyalty of customers and absolute cost advantages. b. Intensity of rivalry of previously established companies new
Words: 544 - Pages: 3
Differentiation 6 Capital Requirements 2 Switching Costs 4 Access to Distribution Channels 2 Cost Disadvantage Independent to Size 5 Government Policy The Global Paper and Paper Product Industry are considered to have a high barrier to entry. It is “rather costly, due to the high capital outlay and fixed costs involved in setting up and running production plants.” Economies of scale provide a competitive advantage for larger companies as they are able to increase production in order to
Words: 1322 - Pages: 6
paragraphs. PART I. COMPETITIVE ADVANTAGE PROJECT FOCUS: (DO NOT INCLUDE THIS SECTION IN YOUR PROJECT – THESE ARE JUST THE DETAILS OF THE PROJECT) • Perform a detailed Porter's Five Forces analysis for The Broadway Cafe. • Be sure to highlight entry barriers, switching costs, and substitute products. • Determine which of Porter's Three Generic strategies you will use as you rebuild The Broadway Cafe for the 21st century. A paragraph describing what is and why you are using Porter’s
Words: 785 - Pages: 4
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 many substitutes
Words: 523 - Pages: 3
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
Words: 970 - Pages: 4
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 by the arrival
Words: 1534 - Pages: 7
being stagnated by the rise in electronic communications (e.g. email) and imports. According to the case, Forest Hill operates in a cyclical environment due to customer buying habits. An advantage for Forest Hill is that there are high barriers to entry within this market due to equipment costs and governmental regulation. Forest Hill can be classified as a “small paperboard manufacturer that produces a broad line of paperboard in large reels.” Forest Hill Strategy: According to the case, “as a small
Words: 291 - Pages: 2
Delta Airlines Board of Directors Presentation October 18, 2013 Consultants: General Overview of Delta Airlines Strategy COMPANY’S SANDBOX High rivalry makes industry unattractive Profitability increasing, but still below cost of capital Consolidation trend has reduced rivals helping profits DELTA’S CURRENT STRATEGY Trainer refinery acquisition: using vertical integration to address Delta’s largest expense Metrics of improving flight completions, on-time arrival rate and decreasing mishandled
Words: 2041 - Pages: 9
