BUSI 2400 Lecture 11: CCR10C9
2 Jul 2018
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Department
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CCR10C9 (attended)
● ECONOMIES OF SCALE MAKE IT DIFFICULT FOR NEW COMPANIES TO
ACHIEVE SUFFICIENT PROFIT , REGULATORY BARRIERS, SWITCHING COSTS,
ACCESS TO DISTRIBUTION OR SUPPLIER CHANNELS FOR NEW ENTRANTS
1. Use Porter's 5 Forces, assess petGRO's new strategy to change its business model
from selling to intermediators in Canada and going to the customer (world)
Threat of substitutes:
● petGRO products are mostly made/manufactured fresher since JIT plays a huge impact
on the process of how the product is delivered/manufactured.
● Once petGRO go to world market then the competitivity will increase. petGRO need to
make more value of their products than those products from manufacturing country (like
china). By development their products more smarter and durable.
● By making product combination, which some accessories should only use petGRO
products and other products can not match the function.
The bargaining power of buyers:
● customer always want to buy the best one, when our products are smarter than others
and quality are better than others. Even products with higher price, customer will still
want to buy.
● Selling directly to customers shows the involvement of ICT, ex:PETCENTRAL, that
offers a great deal of communication between the customer and petGRO. Customers
like it when there’s a good/responsive customer service.
● petGRO offers a variety of sizes for their products, nutriVAL is available in custom bulk
sizes, in which customers who have more than pet would like to go for that option.
Threat of new entrants:
● petGRO selling directly to customers would potentially block most new entrants to join
this industry.
● Firms may be discouraged by developing a route that sends its products directly to its
customers.
● This is because they may feel like it’ll be time consuming and more difficult to design a
new route system.
● Other firms may prefer selling to intermediators in Canada since it is considered to be
efficient to some, in which it already represents an existing route that firms can depend
on.
Bargaining power of suppliers:
- If PetGRO was going to directly sell to the customer then the company would have more
control over the prices we want to sell at internationally. PetGRO can also have the
privilege of bargaining with local businesses to sell their products.
- Fedex is known to be an efficient delivery services company. This gives an advantage for
the supplier to raise price of the shipping cost
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Document Summary
Economies of scale make it difficult for new companies to. Achieve sufficient profit , regulatory barriers, switching costs, Access to distribution or supplier channels for new entrants: use porter"s 5 forces, assess petgro"s new strategy to change its business model from selling to intermediators in canada and going to the customer (world) Petgro products are mostly made/manufactured fresher since jit plays a huge impact on the process of how the product is delivered/manufactured. Once petgro go to world market then the competitivity will increase. petgro need to make more value of their products than those products from manufacturing country (like china). By development their products more smarter and durable. By making product combination, which some accessories should only use petgro products and other products can not match the function. Customer always want to buy the best one, when our products are smarter than others and quality are better than others.
