M110+11+Session+2+post-class

Rivalry is high if large number of competing firms

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

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: firms in intense is the competition among the firms in the industry? • Rivalry is “HIGH” if: – – – – – – – Large number of competing firms Competing firms are the same size and have the same influence firms are the same size and have the same influence Lack of product differentiation Slow industry growth Productive capacity added in large increments capacity added in large increments High exit costs Diverse competitors Threat of New Entrants • How easily can firms enter the industry and compete? • Threat of new entry is “HIGH” if: – – – – – – – – Low capital requirement Limited economies of scale Limited product differentiation Easy access to distribution channels Lack of proprietary technology Lack of know-how of kno Many locations of / easy access to raw materials Deterrence is difficult Bargaining Power of Buyers • Powerful buyers can negotiate lower prices w/ buyers can negotiate lower prices w/ industry firms • Buyer power is “HIGH” if: – – – – – – One buyer purchases a large share of the...
View Full Document

This note was uploaded on 08/16/2011 for the course MGMT 110 taught by Professor Zhang during the Spring '11 term at UC Irvine.

Ask a homework question - tutors are online