Podcast
Questions and Answers
Match the following terms with their definitions:
Match the following terms with their definitions:
Threat of substitutes = Products that fulfill the same customer needs Rivalry among existing firms = Competition among companies in the same industry Key success factors = Requirements for successful participation in an industry Strategic group = Set of companies with similar competitive strategies
Match the following factors with their relevance to rivalry among existing firms:
Match the following factors with their relevance to rivalry among existing firms:
Many competitors = Leads to increased competition for market share Equal company size = Results in balanced competitive advantages Slow industry growth = Causes increased competition and market share fights High exit barriers = Prevents companies from leaving the market easily
Match the following customer analysis questions with their purposes:
Match the following customer analysis questions with their purposes:
Who are the customers? = Identifies target audience What are their unmet needs? = Helps in understanding customer desires How do customers choose products? = Analyzes decision-making processes What competitive factors affect survival? = Determines industry success requirements
Match the following concepts with their benefits:
Match the following concepts with their benefits:
Match the following market conditions with their implications:
Match the following market conditions with their implications:
Match the following elements of analysis with their roles:
Match the following elements of analysis with their roles:
Match the following competitive strategies with their key features:
Match the following competitive strategies with their key features:
Match the following transportation substitutes with each type:
Match the following transportation substitutes with each type:
Match the following concepts with their definitions:
Match the following concepts with their definitions:
Match the following elements of Porter's Five Forces with their descriptions:
Match the following elements of Porter's Five Forces with their descriptions:
Match the following factors influencing buyers' power with their descriptions:
Match the following factors influencing buyers' power with their descriptions:
Match the following characteristics with the bargaining power of suppliers:
Match the following characteristics with the bargaining power of suppliers:
Match the areas of competitive dynamics with their expressions:
Match the areas of competitive dynamics with their expressions:
Match the following situations with the correct impact on competition:
Match the following situations with the correct impact on competition:
Match the source of power for suppliers with their criteria:
Match the source of power for suppliers with their criteria:
Match the components of Porter's Five Forces with their focus:
Match the components of Porter's Five Forces with their focus:
Match the business stage with its key characteristic:
Match the business stage with its key characteristic:
Match the strategy with its corresponding stage:
Match the strategy with its corresponding stage:
Match the business strategy with its emphasis:
Match the business strategy with its emphasis:
Match the characteristic with the appropriate stage:
Match the characteristic with the appropriate stage:
Match the description with the correct stage:
Match the description with the correct stage:
Match the stage with its challenge:
Match the stage with its challenge:
Match the focus with its corresponding strategy:
Match the focus with its corresponding strategy:
Match the characteristic with the business stage:
Match the characteristic with the business stage:
Match the following incentives with their descriptions:
Match the following incentives with their descriptions:
Match the following terms with their definitions:
Match the following terms with their definitions:
Match the following concepts with their implications:
Match the following concepts with their implications:
Match the following factors with their impacts on foreign operations:
Match the following factors with their impacts on foreign operations:
Match the following incentives with their sources:
Match the following incentives with their sources:
Match the following concepts with their outcomes:
Match the following concepts with their outcomes:
Match the following economic conditions with their effects:
Match the following economic conditions with their effects:
Match the following challenges with their descriptions:
Match the following challenges with their descriptions:
Match the following assessment criteria with their descriptions:
Match the following assessment criteria with their descriptions:
Match the following competitive reactions with their characteristics:
Match the following competitive reactions with their characteristics:
Match the following benefits of competitors to a company:
Match the following benefits of competitors to a company:
Match the following customer analysis steps with their purposes:
Match the following customer analysis steps with their purposes:
Match the following strategic group characteristics with their examples:
Match the following strategic group characteristics with their examples:
Match the following resources with their types:
Match the following resources with their types:
Match the following response categories with their definitions:
Match the following response categories with their definitions:
Match the following competitive strategies with their implications:
Match the following competitive strategies with their implications:
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Study Notes
Industry Concentration
- Industry sales are often dominated by a few firms, leading to reduced competition over time.
- Dominant firms benefit from economies of scale, allowing them to lower prices, creating barriers for new entrants and smaller companies.
Economies of Scale
- Savings achieved by companies when producing large quantities, which can enhance competitiveness.
Competitive Dynamics
- Michael Porter’s Five Forces:
- Threat of Entry: Dependent on market entry barriers.
- Bargaining Power of Buyers: Strong when buyers are few, purchase in bulk, products are substitutable, and switching costs are low.
- Bargaining Power of Suppliers: High when suppliers are few, there are no substitutes, products are unique, and switching costs exist.
- Threat of Substitutes: Increases when product differentiation is low; examples include cars vs trains vs airplanes.
- Rivalry Among Existing Firms: Heightened by many equal competitors, slow market growth, and lack of product differentiation.
Key Success Factors (KSFs)
- KSFs vary across industries and lifecycle stages; identifying them requires customer analysis and understanding competitive survival factors.
- Customer analysis focuses on who the customers are, their needs, and their product choice criteria.
Strategic Group Analysis
- A strategic group consists of companies within an industry using similar competitive strategies.
- Benefits include analyzing major strategies, identifying competitors, and evaluating strategic options.
Competitor Analysis
- Critical for designing products that meet consumer needs better than rivals.
- Competitors are categorized based on product quality, features, customer service, pricing, distribution, promotion strategy, and R&D effectiveness.
- Assessing competitors’ strengths/weaknesses through research on resources, performance, and customer preferences is essential.
Estimating Competitor Reactions
- Competitors react differently based on their profit and marketing objectives, influencing competitive strategies.
Selection of Competitors
- Some competitors may positively impact a company by increasing total demand, sharing product development costs, or legitimizing new innovations.
Industry Lifecycle Stages
- Growth Stage: Market share and profitability increase; strategies focus on scaling production.
- Shakeout Stage: Leads to significant exits of smaller competitors; caused by industry saturation and declining growth.
- Maturity Stage: Characterized by standardized products, low prices, high marketing efforts, and aggressive competition for market share.
- Strategies may include pruning product lines, cost reduction, horizontal integration, and international expansion.
- Decline Stage: Marked by decreasing sales; firms need to strategize to counteract long-term market trends.
Global Industry Characteristics
- Decreased barriers to entry allow foreign market penetration.
- Industry concentration declines due to international firms entering markets, fostering increased competition and diversity.
- Consumer buying power rises with more options available in the international marketplace.
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