COMM 173 Study Guide - Final Guide: International Political Economy, Totalitarianism, Economic Mobility
17 Jan 2017
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Class #2: foundations: four models relevant to international business industry. Porters 5 forces: rivalry amongst existing competitors: aside from the rare case of a true monopoly, competition between firms should be considered the norm in every industry. Competition exerts pressure on all firms and limits their ability to increase prices (hence profits). Conversely, in industries where there are a number of competing firms and only a few, large buyers these buyers typically have significant amounts of power: threat of new entrants: any industry earning high profits will attract new entrants. This in turn creates more competition amongst firms in that industry, and will eventually lead to lower profitability. Resource based view (rbv) focuses on identifying the sources of profitability of firms within industries. In this (cid:448)ie(cid:449), a(cid:374) i(cid:374)di(cid:448)idual fi(cid:396)(cid:373)(cid:859)s lo(cid:374)g-te(cid:396)(cid:373) p(cid:396)ofita(cid:271)ilit(cid:455) depe(cid:374)ds o(cid:374) it ha(cid:448)i(cid:374)g a(cid:272)(cid:272)esses to (cid:858)(cid:396)esou(cid:396)(cid:272)es(cid:859) (cid:449)ith spe(cid:272)ial characteristics. According to the rbv in order to sustain competitive advantage, the firm must have access to resources that are:
