02 BUS 444 Chap 2

How would you evaluate porters other forces for this

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Unformatted text preview: tion Capital requirements Switching costs Access to distribution channels Cost disadvantages independent of scale 24 of 40 QUESTION If you are considering opening a new pizza restaurant in your community, what would be the threat of new entrants? How would you evaluate Porter’s other forces for this industry? Explain. 25 of 40 The Bargaining Power of Buyers • Buyers threaten an industry by: Forcing down prices Bargaining for higher quality or more services Playing competitors against each other 26 of 40 The Bargaining Power of Buyers • A buyer group is powerful when It is concentrated or purchases large volumes relative to seller sales The products it purchases from the industry are standard or undifferentiated The buyer faces few switching costs It earns low profits The buyers pose a credible threat of backward integration The industry’s product is unimportant to the quality of the buyer’s products or services 27 of 40 The Bargaining Power of Suppliers • Suppliers can exert power by threatening to raise prices or reduce the quality of purchased goods and services 28 of 40 The Bargaining Power of Suppliers • A supplier group will be powerful when The supplier group is dominated by a few companies and is more concentrated than t...
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This note was uploaded on 03/05/2014 for the course BUS 444 taught by Professor Lynn during the Spring '11 term at Keuka.

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