Beruflich Dokumente
Kultur Dokumente
Daraz Shaikh
Farhat Nasim
Hatim Ali
Bisma Zia
INTRODUCTION
In 1979, Harvard Business Review published
Barrier To Entry
Supply side economies of scale
Deter entry by forcing entrants to either come into
Barriers To Entry
Customer switching cost:
The larger the switching cost the harder it will
be for entrant to gain customer.
Capital requirement:
Need to invest large financial resources in
order to compete can deter new entrants.
Barriers To Entry
Incumbency advantages:
Incumbents may have cost or quality which
results in how to produce more efficiently not
available to potential rival entrants.
Unequal access to distribution channel:
The new entrants must secure distribution of
its product. The more limited distribution
channels are, the tougher entry it will be.
Barriers To Entry
Restrictive government policy:
Govt: policy can hinder new entry by licensing
Daraz Shaikh
Power Of Suppliers
They capture more value by charging higher prices,
Power of Buyers
Capture value by forcing down prices,
Threat Of Substitutes
Substitute performs same or similar function
Rivalry Intensifies
When competitors are numerous or
Competitors are roughly equal in size
When industry growth is slow
Exit barriers are high
Firms are less aware of the competitors
moves.
profitability of business.
Farhat
FACTORS NOT FORCES
competitors
Without new entrants high growth rate is not
guarantee profitability
A narrow focus in growth is consider to be the
bad strategy decisions.
Government
It is not good or bad for industry profitability
analysis
how specific government policies affect the
five competitive forces.
Some time union may raise supplier power.
Political power of Govt
stable.
Shifts in structure may emanate from out-side
an industry or from within. They can boost the
industrys profit potential or reduce it.\
For example
changes in technology
Change in customer needs
Changing in supplier
power
As the factors underlying the power of
key supplier
When the interner allow them sell the ticket
directly
Shifting threat of
substitution
Advancement of technology new substitute
or shifting price.
Performance comparisons in one direction or
in other
For example
priced above $2,000,making them poor
Hatim Ali
Implications for strategy
IMPLICATIONS FOR
STRATEGY
Position your company where the forces are
weakest.
Exploiting and anticipating industrial change.
Industrial structure can be shaped in two
ways:
Redividing Profitability
Expanding overall profit
analysis.
Too broadly obscure differences among products,
customers or geographic regions that are
important to competition, strategic positioning
and profitability.
Too narrowly overlooks commonalities across
related products which are crucial to competitive
advantage.
The five competitive forces holds a key in defining
the relevant industry in which a company
competes.