Business Strategy Susta Economies of scale Product

Business strategy susta economies of scale product

This preview shows page 18 - 23 out of 53 pages.

Business Strategy & Sustainability 18 18 Economies of scale Product differentiation Capital requirements Switching costs Access to distribution channels Cost disadvantages due to size Government policies Barriers to Entry
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Business Strategy & Sustainability 19 19 Number of competitors Rate of industry growth Product or service characteristics Amount of fixed costs Capacity Height of exit barriers Diversity of rivals Rivalry amongst Existing Firms
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Business Strategy & Sustainability 20 20 Substitute product a product that appears to be different but can satisfy the same need as another product The identification of possible substitute products means searching for products that can perform the same function, even though they have a different appearance. Threat of Substitutes
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Business Strategy & Sustainability 21 21 Bargaining power of buyers Ability of buyers to force prices down, bargain for higher quality and play competitors against each other Large purchases, backward integration, alternative suppliers, low cost to change suppliers, product represents a high percentage of buyer’s cost, buyer earns low profits, product is unimportant to buyer Bargaining Power of Buyers
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Business Strategy & Sustainability 22 22 A buyer or a group of suppliers is powerful if some of the following factors hold true: Industry is dominated by a few companies Unique product or service Substitutes are not readily available Ability to forward integrate Bargaining Power of Suppliers
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