ACC 411 Assignment B Solution Spring 2008

ACC 411 Assignment B Solution Spring 2008 - Accounting 411...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting 411 Business Valuation Spring 2008 Assignment B: Industry Analysis Objective: Practice applying Porter’s Five Forces to an industry Analyze this industry using Porter’s Five Forces. For each of the forces, indicate whether it is high, low, or medium, and the rationale for your choice. Threat of new entrants : The most significant issue to consider here is economies of scale. Since the industry is discount stores, the ability to purchase in volume to achieve discounts will be a key factor that would make it difficult for new entrants to jump into this business. First mover advantage, distribution access, and legal barriers really don’t apply. Overall this threat is LOW. Threat of substitutes : Substitute for a discount/variety store may be a traditional department store. It is easy for a customer to switch, but there will be a trade-off – should expect higher price and perhaps higher quality. Overall this threat is LOW- MEDIUM. Buyer power
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Ask a homework question - tutors are online