3.7.7 The Competative environment Flashcards
what is collusion
two or more buisness secretly working together
what is an oligopoly
many major company’s dominant in a sector
what is cost leadership strategy
competitive advantage (lowest cost on the industry)
what is a differentiation strategy
developing something unique so you have a unique selling point
what is a focus strategy
particular segment in market it targeted
what is the porter five forces
an analytics tool that provides a framework for analysing the nature of competition in a market
what is in the porter five forces
top left - power of customers
top right - power of suppliers
middle - intensity of rivalry
bottom left - that of market entry
bottom right - that from substitutes
what are threats of new entrants
new innovation tactics
may have a better reputation (not damaged)
new entrants can have a huge disruptive impact however there can be barriers such as type of market, economies of scale, how many competitors there are
what is buyer power
how much power the buyers have over the buisness
when are buyers likely to be powerful
when it is easy to swap from one buisness to another
less buyers
(less buyers more business to choose from)
when are buyers going to be less powerful
when a buisness has a monopoly
what is supplier power
relates to the relationship between supplier and firm and weather or not the supplier has power over them
when do suppliers have more power
few suppliers
supply something that is scarce
when do suppliers have less power
when there are loads of suppliers and only a couple or one major buisness
