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Location it will be difficult for the company to

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location, it will be difficult for the company to duplicate this method without using extensive research, which will cost a lot of money. 6.Will a newcomer have to “steal” market share from existing players in order to enter this industry or is the industry growing so fast that no one will suffer from a new entrant? Yes, because currently, the market share, despite having 10 major firms, is distributed greatly amongst three of them: Macy’s, JCPenney’s, and ____. 7.Does any new entrant have to obtain licenses or any other form of regulatory approval in order to enter this industry? Explain 8.What action are you likely to take if a new entrant comes in and competes with you in your market? Will you reduce price? Will you innovate? Depending on what this new entrant does, Macy's could imitate the specific area in which the new company is excelling. If the company decides to do something new, Macy's should innovate. A company's competitive advantage is what compels people to come to its store, which is why Macy's should create a new feature or come up with a new strategy in order to retain customers. One trend that started over a decade ago has been a decreasing number of independent retailers. Walk through any mall and you'll notice that a majority of them are chain stores. While the barriers to start up a store are not impossible to overcome, the ability to establish favorable supply contracts, leases and be competitive is becoming virtually impossible. Their vertical structure and centralized buying gives chain stores a competitive advantage over independent retailers. Suppliers set the price of their own products Economies of scale are indeed an effective entry barrier. Larger companies have lower costs than smaller. Since an entrant to this industry would start out small, - economies of scale - proprietary product differences - brand identity
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- switching costs - capital requirements - access to distribution - absolute cost advantage - proprietary learning curve - access to necessary inputs - proprietary low-cost product design - government policy - expected retaliation - By appealing to greater demographics and particularly targeting a slightly more affluent group, the companies with a larger share possess more cash than its smaller competitors . Because this is the case, I believe that a newcomer would have to steal market share from existing players, since it is already greatly distributed among three major companies: Macy’s, JCPenney, and Dillards. To gain market share, a new entrant would be able to manage some control.
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Janine Nipal Business Policy Professor Sen October 26, 2011 Barriers to Entry There are five forces that an industry must acknowledge in order to establish a business strategy. Barriers to entry, which are obstacles of the emerging firm that cause difficulty in entering a specific market, are always a critical aspect to take into consideration when deciding whether or not a company should enter an industry. Non-discount department stores, in which Macy’s is categorized, have many obstacles to overcome. The challenges that a new firm or prospective competitor would encounter are relatively high.
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