Management MGT 380 Study Guide - Final Guide: Domenico De Sole, Complementary Good, Inkjet Printing
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Ca, and as a result earns above-average returns: market vs. industry, market = customer focus (demand side) Industries are more profitable when there is less intense price competition. Incumbents don"t control distribution channels or sources of supplies. Incumbents lack proprietary knowledge or technology: no network externalities or network effects, government doesn"t protect incumbents through subsidies, or regulation of prices and entry, 2 types of entry barriers, 1. Structural entry barriers are inherent natural advantages that incumbents have simply by virtue of incumbency, and that do not require any ongoing action by incumbents: 2. Market share * new brand sales: 2. (1) / # of new brands in period = % market per brand, 3. In situations where costs are mostly fixed, low market share can be a huge disadvantage: dynamic changes in industry structure can significantly influence firm"s competitive position to mold industry, firm must reshape powerful industry elements.
