SGMT 3000 Lecture Notes - Lecture 2: Acura, Social Forces, Tacit Collusion
9 May 2016
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Within a sector there are several industries. Within a industry ae several market segments. Michael porter"s 5 factor model: risk of enter, bargaining power of supplier, threat of substitutes, bargaining power of buyers, rivalry among established firms inindustry, 6th factor later added: power of complement providers. Can you apply the five-factor model to compare the profitability differences btw loblaws ad metro: no, the six factors of the model are almost the same for both companies. Porters model used to compare the profiabilty btw two industries: could use it to compare loblaws and while food, can use if same industry but different market segment. High: if companies are in the same industry, same market share, porters model is not suitable. Used to explain why some industries are so profitablitly. Industry level model, not a firm level model. Can group firms by strategic group within an industry (i. e aerospace industry grouped by seat capacity and range.
