COMMERCE 4PA3 Chapter Notes - Chapter 4: Vertical Integration, Switching Barriers, Product Differentiation

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 4PA3
• Professor: Peter Vilks

Document Summary

Pest analysis examines political, economic, social, and technological forces that impact th. These forces can be viewed as macro in orientation, and in many respects they are the ear about changes in an industry. The pest forces impact supply, competition and demand. Overall, pest forces can have a long lead time in their evolution or development. The final outcome or impact of the force may be less than precise. Finally the more similar industry incumbents are to each other the more likely pest factor industry incumbents. Attractiveness is related to average industry profitability: the higher the average industry attractive the industry. Porter suggests that there are five competitive forces that shape industry attractiveness: r competitors, threat of new entrants, threat of substitute products/services, bargaining po bargaining power of suppliers. Examining the five forces helps organizations understand how the value created by compan captured by industry players.