3 Rivalry This involves how many firms are in the industry and how their

3 rivalry this involves how many firms are in the

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3)Rivalry: This involves how many firms are in the industry and how their competitive dynamics reduce profitability. Intra-industry rivalry is the strongest force within the transportation industry because DDOT only runs service within the District. WMATA, another transit agency reaches into Maryland and Virginia connecting its customers to many additional points around the city. DDOT faces competition domestically from other large transit agencies such as WMATA. No cost introductory services on the DC Circulator (bus) and DC Streetcar (light rail) helps to further intensify the competition. Several of the bus routes were taken directlyfrom WMATA management. DDOT must continue to separate itself from the competition through continued leverage, offering top-notch customer service and continuing to acquire additional transit routes eliminating a source of competition.4)Bargaining power of buyers (customers): The bargaining power of customers is also described as the market of outputs. It is the ability of customers to put the firm under pressure, which also affects the customer’s sensitivity to price changes. One example of this is WMATA experiencing a decrease in ridership due to imposed fare hikes or government shutdowns. The loss of a single customer is minimal, to the bottom line of DDOT. When taken as a group the bargaining power is immense. DDOT must strive to attract new customers and encourage existing customers to continue to utilize the services offered. New customers will have to buy 7 | P a g e
into the idea of mass transportation which may be easier in urban areas as opposed to more rural areas. 5)Bargaining power of suppliers: The bargaining power of suppliers is also described as themarket of inputs. When there are few substitutes, suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm. Suppliers can refuse to work with the firm or charge excessively high prices for unique resources. Similar to power of buyers, this bargaining power relies on scarcity and basic economics of supply and demand. Applying it to a specific segment of the transportation industry, transportation construction, easily demonstrates why it is such a difficult business to compete in Washington, D.C. Suppliers’ bargaining power is immense because two Construction Contractors, Contractor A, and Contractor B dominate the construction market in Washington, D.C. This threat is minimal when looking at the groups as individuals but when examined as a group the bargaining power is considerable. The approach DDOT should take when dealing with this threat would be to work to attract new Contractors and maintain the relationships with existing Contractors. In terms of employees DDOT should offer salaries and benefits that attract and retain the most Strategic Group“Strategic groups are sets of firms that follow similar strategies to on another” but “differ in important ways from the members of other groups” (Mapping Strategic Groups, 2012). It is

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