1.3 - Identify the competitive forces that impact on relationships in supply chain Flashcards
Name porters 5 forces
- Potential substitutes
- Threat of new entrants
- Bargaining strength of suppliers
- Bargaining strength of buyers
- competitive rivalry
Is porters 5 forces micro or macro
Micro-environmental analysis
Name 8 types of market
- Monopoly
- Duopoly
- Oliogopoly
- Imperfect competition
- Monopolistic competition
6.Perfect competition - Oligopsony
- Monopsony
Monopoly
A situation where one supplier has the entire market share and there is no competition
Sole-source
When the buyer has no choice and has only one potential supplier to contract with in the marketplace
Merger
A mutual decision for organisations to form a joint ownership
Acuisition
The method by which an organisation takes ownership of another organisation
Price elasticity
A measure of the change in demand for a product or service in relation to changes in its price. If a product is price elastic, the more the price is reduced the more demand will rise. Generally for a product to be price elastic there will need to be a number of substitute products. price elasticity of demand is a measure of how responsive the demand for a product is in relation to its price
Barriers to entry
An economic term describing the existence of obstacles (such as high start up costs) that prevent new competitors from entering an industry or business sector
Name the supplier power, buyer power and example of a monopoly
- Very high
- Very low
- Utilities such as water
Name the supplier power, buyer power and example of a duopoly
- High
- Low
- Commercial alliance such as airbus and boeing
Name the supplier power, buyer power and example of a oligpopoly
- High
- Low
- Oil and gas companies
Name the supplier power, buyer power and example of a imperfect competition
- Weakening
- Strengthening
- See examples for monopoly and oligopoly
Name the supplier power, buyer power and example of a monopolistic competition
- Strengthening
- Weakening
- Possible where supplier can differentiate, such as restaurants and hotels
Name the supplier power, buyer power and example of a perfect competition
- Low
- Very High
- Agricultural produce
Name the supplier power, buyer power and example of a Oligopsony
- Low
- Very High
- NHS example with premier league club investment
Name the supplier power, buyer power and example of a Monopsony
- very low
- Very high
- Large retail supermarket retailers such as Walmart
Name 5 factors that affect rivalry between companies
- Industry growth or decline
- Product differences/brand identities
- Switching costs
- Diversity of competitors
- Exit barriers
Name 7 barriers to entry
- Economies of scale
- Access to capital and high start up costs
- Licences and permits
- Strong brand identities already dominant in the marketplace
- High switching costs for buyers to switch to alternative products and services
- Access to distribution networks
- Government policy
Name 4 factors that affect substitution
- Relative price performance of substitutes
- Switching costs for buyers
- Fashion, technology and market trends including the dominance of influencers and marketing investment
- Buyer propensity to substitute nd how they evaluate the economic benefits
Name 4 factors that mean supplier power is strong
- Supplier can differentiate it offering
- Switching costs for buyers are high
- There is a lack of substitute products or services
- There are a number of suppliers in the marketplace
Monopsony
A market with only one buyer
Backward integration
A situation where the buying organisation purchases one of its suppliers of raw materials. The raw materials supplier is further back in the supply chain
Forward integration
A situation where an organisation purchases a customer or agent managing its customer delivery mechanisms
Vertical intergration
When a buyer owns companies within its supply chain. there could be forward vertical integration where a buyer owns a distributor, or backward vertical integration where a buyer owns one of its suppliers of raw materials
Horizontal integration
A situation when an organisation buys or merges with a competitor in the marketplace usually to increase its competitive volume
Name 6 factors that affect buyer power
- The number of buyers in the marketplace versus the number of suppliers
- The volume of purchases made by buyers
- Costs for buyers
- Availability of information for decision making
- Ability to integrate, whether backwards, forwards, vertically or horizontally
- Substitution of products and services
Name the 4 sections of the matrix developed by Cox 2000 (effect of buyer and supplier power)
- Buyer dominance
- Interdependence
- Independence
- Supplier dominance
What does STEEPLED analyse?
Potentail external influences and risks that could affect a company or marketplace
What does STEEPLED stand for?
Social
Technological
Economic
Environmental
Political
Legislative
Ethical
Demographical
Disruptive technologies
New or enhanced technologies that replace or affect existing technology making it obsolete. An example is cloud computing services which are a disruptive technology for in-house services
Business cycle
The rise and fall over time of output in an economy as measured by gross domestic product
Globalisation
The process by which the world is becoming more interconnected, which means that events in one location are shaped by things that happen many miles away. Companies are also increasingly affected by global and long wave economic cycles
Name the 4 stages of the business cycle
- Peak
- Recession
- Slump
- Recovery
Force majeure
A contract exclusion clause, limiting liability when a party is unable to fulfil its obkigations under a contract due to genuinely unforeseen and unpreventable circumstances such as earthquakes. Force majeure events are often referred to as acts of god
Corporate social responsibility (CSR)
An organisational sustainability framework to embed into strategy and operations and supply chains to have a positive global impact
Ethical sourcing
Ensuring that products are obtained in a responsible and sustainable way that demonstrates respect for the people who produce them and for the environment
