describes eight major sources of barriers to entry, the presence or abcsence of which determines the extent of threat of new industry entrants. Product differentiation can be achived as a result of unique product attributes or effective marketing communications, the third entery barrier relates to capital requirements, a fourth would be switching costs which is caused by the need to change suppliers and products. Now we come to the fifth barrier to entry that is refered to distribution channels, sixth
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returns to stakeholder. Question 2 what reasons account for firm’s decision to use acquisition strategies as one of means of achieving strategic competitiveness? Firms use acquisition strategies to: Increased market power, Overcoming entry barriers, Cost of new product development, Increased speed to market, Lower risk compared to developing new products, Increased diversification, Reshaping the firm’s competitive scope. Question 3 what are the seven primary problems that
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RTE Cereal Industry Barriers to Entry Giovanni Massari 1) Economies of Scale: with regards to Economies of Scale, we have Product-Specific ones with regard to the fact that there is a minimum efficient scale of production in the industry, without which firms wouldn’t survive in the environment; requirements, in this case, are 75 million pounds of cereals per year to be efficient. Other scale economies can be Multi-Product ES (“Economies of Scope”); indeed, different types of cereals can be
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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
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Stacey Tile Company case 1) a. Is Mr. Gilbert a good manager? Why? b. Please analyze the case using one of the theoretical frameworks/tools discussed during the class. This case is about a tile company which is threatened with foreclosure and Mr. Gilbert, a manager, who decided to take control over the Stacey Company and tried to make a profitable one. The main issue is to reestablish the company by increasing production on high quality and concentrate sales on tile setters
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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
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PALLAVI KARANDE BATCH 84 ROLL NUMBER 26 ITM SION SMBA CASE STUDY FOR ITC ENTERING INTO TELECOM SECTOR ITC: ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and AgriExports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal
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THE EXTERNAL AND INTERNAL ENVIRONMENTS If managers in the airline industry are going to run their organizations efficiently, they have to understand the external environment confronting them, anticipate how changes in the environment might affect the profitability of their airlines, and take appropriate actions. These actions might include reducing capacity as demand declines, purchasing more fuel-efficient jets, avoiding price wars with low-cost airlines if possible, and reducing labor costs. At
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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
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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
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