MGT 409 Lecture Notes - Lecture 4: Floppy Disk, Switching Barriers, Apple Inc.
Document Summary
External environment: includes the industry in which a firm competes as well as those against whom it competes. Goods or services from outside a given industry with performance similar or the same functions as a product that the industry produces. Flash drive substitutes floppy disk ipod substitutes cassette / cd players. Substitution effect can be severe if the substitute is functionally superior; charges lower prices; generates lower switching costs; Create economies of scale /reduce costs: wal-mart. Create switching costs: microsoft dominant design strategy. Create firm interdependence: intel platform strategy. Government policy: biomedical firms - patent protection. A buyer group is powerful when: large, concentrated buyers (e. g. , walmart, standardized, undifferentiated products, few switching costs, buyers have low profits, backward integration (i. e. , buyer can purchase supplier or buyer can produce similar products) Indust(cid:396)y"s p(cid:396)odu(cid:272)ts a(cid:396)e (cid:374)ot ve(cid:396)y i(cid:373)po(cid:396)ta(cid:374)t to the (cid:395)uality of (cid:271)uye(cid:396)"s p(cid:396)odu(cid:272)ts o(cid:396) se(cid:396)vi(cid:272)es.
