This model can be useful in analyzing the markets in which Iknoor operates with

This model can be useful in analyzing the markets in

This preview shows page 11 - 14 out of 22 pages.

bargaining power (Porter 26). This model can be useful in analyzing the markets in which Iknoor operates, with respect to attractiveness through innate profit potentials. Strategic planners for Iknoor to make strategic decisions using the information analyzed with the model. Threat of New Entrants (Low)
Image of page 11
Surname 12 It is very problematic to attain economies of scale in markets such as the one in which Iknoor conducts business. The implication is that it is easy for organizations producing large capacitates to have cost advantages in relation to smaller players. Additionally, this makes production costly for new entrants, which denotes that the threat of new entrants is low. By contrast, product differentiation is insignificant in the trucking and construction industries – most firms provide standardized products and services rather than differentiated products (Barla et al. 260). As such, product differentiation cannot give a company an edge over competitors because consumers do look for differentiated products. Moreover, with such levels of product similarities, companies have focused on customer service and advertising, which require significant resources that new entrants lack to threaten established firms in the market. Capital requirements within the trucking and construction industries are high. Numerous machines, supply chain logistics, equipment, and personnel prerequisites must be met before breaking even in these industries. As a result, it is problematic for new players to establish businesses due to the high expenditures. Other aspects such as high research and development costs prevent the entry of new players in the market. Furthermore, establishing and accessing distribution networks is not easy for new entrants (Thiffault 31). With almost all companies providing similar product types, it is likely that some share raw material suppliers and distribution channels. However, while it easy for new entrants to set up their distribution channels and get their products to the market, it is difficult to convince distributors of dominant players to switch alliances. Moreover, government policies relevant to the trucking and construction industries necessitate strict licensing and compliance to legal guidelines before an organization can market its products. With the restrictive government regulations whose approval
Image of page 12
Surname 13 takes time, the possibility of new entrants joining the two industries is limited thereby making the threat insignificant. How Iknoor can tackle the Threat of New Entrants Iknoor can exploit the economies of scale it enjoys in the trucking and construction industries to fight off new entrants using its cost advantages. Besides, Iknoor can embark on innovation to make its trucking services unique from those offered by new entrants (Menon et al.
Image of page 13
Image of page 14

You've reached the end of your free preview.

Want to read all 22 pages?

  • Fall '15
  • Mr. Njoroge

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors