Chapter 5 - Chapter 5 Industry and Competitor Analysis...

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Chapter 5 Industry and Competitor Analysis ***Highlighted = Notes on Exam 1 Study Guide*** Industry – a group of firms producing a similar product or service. Industry Analysis – is the business research that focuses on the potential of an industry. Once the new venture is deemed feasible in regard to the industry and market in which it will compete, a more in-depth analysis is needed. Three questions : 1. Is the industry accessible – it a realistic place for a new venture to enter? 2. Does the industry contain markets that are ripe for innovation or are underserved? 3. Are there positions in the industry that will avoid some of the negative attributes of the industry? Importance of Industry Versus Firm Specific Factors - both firm- and industry-specific factors contribute to a firm’s profitability. 1. Firm-level factors include a firm’s: a) assets b) products c) culture and teamwork among its employees d) reputation e) other resources 2. Industry-specific factors include: a) the threat of new entrants b) rivalry among existing firms c) the bargaining power of suppliers d) and other factors discussed in the chapter The Five Competitive Forces That Determine Industry Profitability - for understanding the structure of an industry and to determine industry profitability. Each of the five forces impacts the average rate of return for the firms in an industry by applying pressure on industry profitability. Goal is to position the firms in a way that avoids or diminishes these forces – in an attempt to beat the
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This note was uploaded on 06/12/2011 for the course MNGT 305 taught by Professor Chadwick during the Spring '11 term at Nicholls State.

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Chapter 5 - Chapter 5 Industry and Competitor Analysis...

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