MGMT 101 Chapter Notes - Chapter N/A: Customer Switching, Switching Barriers
Document Summary
Necessary for both fixed facilities and extending customer credit, building inventories, and funding start-up losses. Government policies can also make entry easier through subsidies or indirectly funding basic research: expected retaliation how potential entrants believe incumbents will react to their decision to enter an industry. New entrants are likely to fear expected retaliation if: Incumbents have previously responded vigorously to new entrants. Incumbents have substantial resources (cash, borrowing power, productive capacity, etc. ) to fight back. Incumbents seem likely and able to cut prices. The power of suppliers: suppliers have more power when: They are more concentrated than the industry they sell to (i. e. microsoft operating systems and the pc industry) Suppliers serve many industries and does not depend heavily on one industry for its revenues. There are switching costs for industry participants. The supplier can credibly threaten to integrate forward into the industry.
