Term Papers on Industry Practices from Term Papers Lab.
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INDUSTRY ANALYSIS (Porter model)
Five forces shape the competitive environment:
1. the rivalry among already existing companies ( direct competition)
2. potential new entrants
3. bargaining power of customers
4. bargaining power of suppliers
5. substitutes (indirect competition)
1. The rivalry among established companies leads to price competition and loss of profits.
The extent of rivalry among established companies depends on:
competitive structure
product differentiation - branding ( advertising, patents, innovation, research and development, product quality, good after-sales service)
demand conditions - if consumers buy less, the existing companies are fighting to maintain profitability and market share by taking away customers from other companies
exit barriers - may be a major problem when industry demand is declining
o strategic - a low-profit business unit provides inputs for a high profit business unit
o economic - no alternative use of......
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Title: Industry Practices
Approximate Word Count: 485
Approximate Pages: 2 (250 words per double-spaced page)
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