QUIZ TWO
Victoria Geisen
2/20/17
The seven questions:
1) Do the dominant economic characteristics of the industry offer sellers opportunties for growth and attractive profits?
2) What kind of competitive forces are industry members facing, and how strong is each force?
3) What forces are driving industry change, and what impact will these changes have on competitive intensity and industry profitability?
4) What market positions do industry rivals occupy-who is strongly positioned and who is not?
5) What strategic moves are rivals likely to make next?
6) What are the key factors of competitive success?
7) Does the industry outlook offer good prospects for profitability?
(40)
Five examples to consider economic characteristics are market size and growth rate, scope of competitive rivalry, demand supply conditions, market segmentation, and pace of technological change. (41)
26 words
3. Competitive pressures stemming from buyer
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Common types of Key Success Factors include Technology related KSF’s, Manufacturing related KSFs, and Marketing related KSFs. (62-63)
Total words 40
The five questions:
1) How well is the company’s strategy working?
2) What are the company’s competitively important resources and capabilities?
3) Are the company’s cost structure and customer value proposition competitive?
4) Is the company competitively stronger or weaker than key rivals?
5) What strategic issues and problems merit front burner managerial attention? (69)
Two best indicators are whether the company is recording gains in financial strength and profitability and whether the company’s competitive strength and market standing are improving. (69)
Words 26
A resource is a competitive asset that is owned or controlled by a company. Some examples are plants, patents, and manufacturing
Departmentalization base is the big plan by which jobs are grouped into units.in facts few organization show only one departmentalization base. The most common bases are function, product, location, and customer. The decision to use many bases is usually based on the specific needs of the corporation and on the strong
In order to review the historical health of the firm I will calculate different ratios and gross margins and would try to see the trend. I will use Gordon Growth Model to find out the sustainable growth rate for the firm using historical data and then would compare it with its actual growth rate.
...t Bosch GmbH, Tenneco and Honeywell. The demand for the products depends on the competitive atmosphere, including the timely development and introduction of new and competitive products and the company’s response to downward pricing to sustain competition. Factors including changes in customer order patterns and competitors’ new products could impact the company’s competitive ability. (Cummins)
This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
A good specific indicator can the companies use to measure progress and performance is by having a list of questions to be answered from both companies and see how satisfied are they.
2. Growth in existing markets – growth will come by increasing market share through additional door rollouts, comp sales, and launching new categories like watches
Porter’s is a tool for evaluating, and estimating the competitive advantage and business situation of a corporate entity. Mainly, five forces analysis identifies the business strengths of an organization, pointing weaknesses and avoiding mistakes. Components of the five forces analysis include the supplier power, buyer power, competitive rivalry, threat of substitution, and the threat of new entry. In this case, the most important forces that can potentially impact P&G’s profitability growth is competitive rivalry and the threat of new entrants in the market. The force with the strongest intensity is a competitive rivalry, due to the massive number of companies operating in the industry. The low cost of switching from one brand to another increases the force of competition. For instance, consumers can move from using P&G’s Crest toothpaste to CL’s Colgate with minimal
The changing business environment- highly competitive "global" product markets, an increasingly rapid advancements in Information and Communication Technology (ICT) and increasing capital intensity of production.
When the price of a product is high, the producers are motivated to produce more products because the revenue is determined by both the price and quantity sold. A high price in the market attracts a high level of supply. The large supply of the products affects the market greatly. The large production increases flooding aspect of the products in the market. Therefore, available products create a large pool of choice for the buyer (Deltas, 2008).
of a firm to attain new forms of competitive advantage (Müller, 2011). It is due to these
Resources are organization’s productive assets and capabilities are what an organization is capable of doing. The relationship between resources and capabilities of a company forms a competitive advantage. Capabilities and resources help in gaining value and competitive advantage over competitors.
These forces will make the market a dynamic and highly competitive place. In the IT industry to determine the intensity is the degree of difference between products, the growth are of an industry and much more. If the large number of firms is rises because more firms is compete the same customers. The growth rate of an industry there will be a competition between firms is when a slow growth industry is stronger than the fast growth industry. Then, the number and balance of the competitors is when have more competitors there will be one or more will cutting its price for increased the customers. Sometimes, the competitors are not similar in size or capability for attracted the
Potential new entrants: With positive economic outlook, fine business environment, and increasing number of population growth rate, it is expected that there will be more companies coming in the industry;
Porter’s five forces is a framework for analyzing an industry and business strategy development. It looks at forces that determine the competitive intensity of an industry and hence the overall attractiveness of that industry. The configuration of the five forces differs by industry. Understanding the competitive forces and their underlying causes reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition over time.
Michael Porter has postulated that the intensity of competition in an industry is determined by its underlying economic structure1. And he further contends as we saw above, that the industry structure is shaped by five basic competitive forces: the threat of new entrances into the industry, the bargaining power of suppliers to the industry, the threat of substitute products or services, the bargaining power of customers or buyers, and the Rivalry among Existing Firms. The figure shows these competitive forces.