3.7.7 the competitive environment Flashcards
what is the competitive structure of an industry?
the number and strength of competing forms in an industry and the ease of entry for new competitors
what are the 5 types of competitive structure?
monopoly
duopoly
oligopoly
monopolistic competition
perfect competition
what is a monopoly?
one firm dominates the market
what is a duopoly?
two firms dominate the market
what is an oligopoly?
a small number of firms are in the industry
what is monopolistic competition?
many firms compete in the industry selling differentiated products
what is perfect competition?
many firms in the industry with no influence on market price
what are porters 5 forces?
intensity of competition rivalry
bargaining power of customers
threat of substitute products
bargaining power of suppliers
threat of new entrants
what are examples of ‘intensity of competition rivalry’?
number of competitors
industry growth
quality differences
diversity of competitors
brand loyalty
switching costs
what are examples of ‘threat of new entrants’?
barriers to entry
economies of scale
brand loyalty
cumulative experience
government policy
access to distribution channels
what are examples of ‘bargaining power of buyers’?
number of customers
size of customer orders
price sensitivity
buyers ability to substitute
differences between competitors
buyers info availability
what are examples of ‘threat of substitute products’?
number of substitutes available
buyer propensity to substitutes
relative price performance of substitutes
perceived level of product differentiation
switching costs
what are example of ‘bargaining power of suppliers’?
number and size of suppliers
uniqueness of each supplier’s product
focal company’s ability to substitute
