Danger of New Entrants: Barriers to Entry
Economies of scale
Access to circulation channels
Cost disadvantages 3rd party of scale
Government insurance plan
Barriers to Entry
Financial systems of Size
Marginal improvements in performance that a company experiences mainly because it incrementally raises its size
Factors (advantages and disadvantages) related to large- and modest entry
Flexibility in prices and market share
Costs linked to scale economies
Barriers to Entry (cont'd)
Products by competitive rates
Accessibility to capital
Moving over Costs
One-time costs consumers incur after they buy from another type of supplier
Clairvoyant costs of ending a relationship
Use of Distribution Channels
Stocking or shelf space
Cooperative promoting allowances
Limitations to Entrance (cont'd)
Cost Disadvantages 3rd party of Range
Proprietary merchandise technology
Good access to raw materials
Licensing and invite requirements
Deregulation of sectors
Responses by existing opponents may rely upon a business present risk in the industry (available business options)
Bargaining Benefits of Suppliers
Supplier power raises when:
Suppliers are large and handful of in number.
Suitable replacement products are certainly not available.
Individual buyers are generally not large clients of suppliers and there are some of them.
Suppliers' merchandise are critical to the buyers' marketplace accomplishment.
Suppliers' items create substantial switching costs.
Suppliers cause a threat to combine forward into buyers' sector.
Bargaining Power of Buyers
Purchaser power boosts when:
Buyers are significant and few in amount.
Buyers obtain a large percentage of an industry's total outcome.
Buyers' buys are a significant portion of a supplier's annual income.
Buyers' turning costs happen to be low.
Potential buyers can pose danger to combine backward into the sellers' industry.
Threat of Substitute Items
The danger of replacement products raises when:
Buyers face handful of switching costs.
The replacement product's price is lower.
Alternative product's quality and performance are comparable to or greater than the existing item.
Differentiated sector products which can be valued simply by customers reduce this danger.
Intensity of Rivalry Between Competitors
Sector rivalry increases when:
There are numerous or equally balanced competition.
Industry growth slows or declines.
You will find high fixed costs or high storage costs.
There exists a lack of difference opportunities or perhaps low switching costs.
When the strategic levels are excessive.
When substantial exit limitations prevent competition from leaving the sector.
Interpreting Market Analyses
Interpreting Industry Analyses (cont'd)
Tactical Group Identified
A set of companies emphasizing similar strategic dimensions and employing similar tactics
Internal competition between proper group firms is greater than between firms outside that strategic group.
There is even more heterogeneity inside the performance of firms within strategic groupings.
Similar marketplace positions
Related strategic actions
Extent of technological leadership
Product top quality
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