Chapter 2 - Industry-based view Flashcards
1
Q
What is an industry?
A
A group of firms producing products that are similar
2
Q
What is Industrial Organization Economics Model?
A
The industry structure determines strategy and firm performance
3
Q
Give an example of a Industrial Organization Economics Model
A
S-C-P Model
=> Structure
=> Conduct
=> Performance
4
Q
What the 5 forces of Porter state?
A
A firms’s performance depends of the degree of competitiveness of the five forces within an industry
5
Q
What are the 5 forces?
A
Industry competitiveness depends on:
- Rivalry among competitors (cannot establish dominance)
- Threat of new entrants (entry barriers)
- Bargaining power of suppliers (raise price and reduce quality)
- Bargaining powere of buyers
- Threat of substitutes
=> Not industry are equal in terms of potential profitability
6
Q
What are the 3 generic strategies?
A
- Cost leadership (low cost, low price, efficienty, high volume)
- Differenciation (valuable, different, premium prices)
- Focus (niche market, ultimate knowledge)
