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Definition
| arise when a company can take advantage of conditions in its environment to formulate and implement strategies to enable profitability |
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Definition
| arise when conditions in the external environment endanger integrity and profitability of biz |
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Definition
| a group of closely related industries |
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Definition
1. risk of entry by competitors
2. intensity of rivalry within industry
3. bargaining power of buyers
4. bargaining power of suppliers
5. closeness of substitutes |
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Definition
- macro (mega): affects a firm indirectly
- task: directly |
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Definition
| presence of "complementors" -- or complementary products |
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| greater threats (Porter's 5) |
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Definition
| the more limited the ability of companies to raise prices & earn greater profits |
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Definition
| greater (monopoly-like) profits |
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Definition
+ varies over a period of time during which the industry evolves. The industry evolution is given by the "industry life cycle"
- If the environment changes rapidly, it is not very useful |
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Definition
- economies of scale: unit costs fall as firm expands output
- brand loyalty
- absolute cost advantages: entrants cannot match lower cost structure
- customer switching costs
- govmt regulation |
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Term
| rivalry among established companies |
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Definition
Intensity a function of four factors:
1. Industry competitive structure
2. Demand conditions
3. Cost conditions
4. Height of exit barriers in the industry |
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Term
| bargaining power of buyers |
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Definition
ability of buyers to
- bargain down prices charge by companies
- to raise costs of companies by demanding better product quality and service |
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Term
| bargaining power of suppliers |
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Definition
ability of suppliers
- to raise input prices
- to raise costs of industry in other ways (providing poor quality input or service) |
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Definition
| within-industry factors that inhibit the movement of companies between strategic groups |
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Term
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Definition
- Embryonic: just beginning to develop, slow growth
- Growth: customers become familiar with product, prices fall due to scale economies, distribution develops
- Shakeout: intense rivalry
- Mature: total market saturation, growth low to zero
- Decline: negative growth; fierce competition |
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Term
| limitations of industry analysis |
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Definition
- industry life cycle is a generalization
- innovation is a major factor in industry revolution
- models overemphasize importance of industry structure and underemphasize variations among companies |
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