ADMS 1000 Lecture Notes - Lecture 5: Bargaining Power, Switching Barriers, Vertical Integration

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Paulette Burgher

Document Summary

Strategic management: consists of the analysis, decisions implementations and evolutions a firm undertakes in order to sustain and create its competitive advantages: analyze its internal and external environment, make decisions about strategies, implement and evaluate the strategies. Strategy: plans made or the actions taken, in an effort to help an organization/firm obtain its intended purposes. Industry: a group of organizations/firms that share similar resource requirement: labour, raw material, technology, and customers. Five forces model: allows us to systematically assess the industry environment: bargaining power of suppliers, bargaining power of buyers, threats for new entrants, threats of substitute products, rivalry. Explanation: threats of new entrants, new start-ups or diversification of existing firms, create entry barriers. The more units you buy the less each unit costs. For example, if walmart buys 5000 shoes, each shoe will cost them less to buy, but if a small store buys 500 shoes, the cost of that shoe will be more compared to walmart.