COMM 315 Lecture Notes - Lecture 99: Capacity Utilization, Reward System, High-Yield Debt
26 Apr 2016
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Document Summary
Threats of new entrants: economies of scale, product differentiation, capital requirements, switching costs, access to distribution channels, cost disadvantages (economies of scale, government policy, expected retaliation. Bargaining power of buyers: buyers are concentrated or the purchases are large relative to the supplier"s sales, purchases account for a significant amount of the industry"s sales, the products are undifferentiated, buyers face low switching costs, buyer presents a credible threat of backwards integration, the quality of the product doesn"t matter in the industry, the buyer has full information. Overall an industry analysis consists of six steps: define the industry, evaluate each of the five forces (including identifying industry participants, determine overall industry structure, profitability level, controlling forces, positioning of above average performers, analyze recent and potential future changes for each force, identify industry structure aspects that might be influenced by competitors, new entrants, or own firm.
