BSM 600 Study Guide - Midterm Guide: Pest Analysis, Product Differentiation, Bargaining Power
25 May 2016
School
Department
Course
Professor
Document Summary
When an industry is flourishing, people want to join in. Barriers to entry can demotivate people from entering market. Capital requirements (cost of getting established in industry) Absolute cost advantages (low cost sources, knowledge gained through experience) Access to channels of distribution (shelf space) If there are no substitutes, price can be anything. If there are substitutes, consumers will switch between brands. Ease in which firms can switch between different input suppliers and the relative bargaining power of each party. Importance of item proportionate to total cost. More intense competition among buyers, more price reductions from sellers. More critical product for quality, less sensitive buyers. Size and concentration of buyers relative to suppliers. Find ways of changing industry structure for the better. Entering a new industry/market by creating a new product/service. Organizational capability: a firm"s capacity to use resources for a desired end result.
