INDUSTRY STRUCTURE

Question 1

WHAT IS STRATEGY?

Answer 1

IS THE LINK BETWEEN THE FIRM AND ITS ENVIRONMENT. THE FIRM BEING THE TEAM,THE RESOURCES, THE STRUCTURES AND SYSTEMS AND THE ENVIRONMENT BEING THE SUPPLIERS, COMPETITORS AND CUSTOMERS

Question 2

HOW TO HAVE A SUCCESSFUL STRATEGY?

Answer 2

BY EFFECTIVELY IMPLEMENTING THE OBJECTIVES OF THE FIRM, UNDERSTANDING THE ENVIRONMENT AND HAVING KNOWLEDGE OF THE RESOURCES AVAILABLE

Question 3

WHAT IS THE FIRM’S MACRO-ENVIRONMENT?

Answer 3

IS ALL THE MAJOR UNCONTROLLABLE FORCES THAT ALSO DICTATE HOW THE COMPANY WILL BE MAKING DECISIONS

Question 4

WHAT ARE THE FORCES THAT CONTROL THE MACRO ENVIRONMENT?

Answer 4

THE NATURAL ENVIRONMENT
NATIONAL AND INTERNATIONAL ECONOMY
GOVERNMENT
TECHNOLOGY
SOCIAL AND DEMOGRAPHIC STRUCTURES

Question 5

WHAT IS THE FIVE FORCES MODEL OF COMPETITION ( BY M. PORTER)
NAME THE 5 FORCES

Answer 5

ARE 5 COMPETITIVE FORCES THAT SHAPE THE INDUSTRY AND HELPS FIRMS TO IDENTIFY STRENGTHS AND WEAKNESSES.
RIVALRY AMONG FIRMS
THREAT OF NEW ENTRANTS
THREAT OF SUBSTITUTES
BARGAINING POWER OF SUPPLIERS
BARGAINING POWER OF BUYERS

Question 6

EXPLAIN RIVALRY AMONG FIRMS AND SOME FACTORS THAT INFLUENCE THE INTENSITY OF COMPETITION AMONG FIRMS

Answer 6

THE EXTENT OF COMPETITION AMONG EXISTING FIRMS.
SOME FACTORS ARE :
THE INCREASE IN THE NUMBER OF COMPETITORS
THE INCREASING DEMAND OF A PRODUCT
THE DISSATISFACTION WITH MARKET POSITION LEADING TO COMPETITIVE REACTION SUCH AS LOWERING PRICES AND CREATING NEW PRODUCTS

Question 7

EXPLAIN POWER OF SUPPLIERS AND WHAT FACTORS INFLUENCE THE POWER OF SUPPLIERS

Answer 7

SUPPLIERS HAVE THE POWER OF INFLUENCING ON PRICES AND AVAILABILITY OF RESOURCES SO THEY ARE MORE POWERFUL WHEN COMPANIES ARE DEPENDENT ON THEM.
FACTORS:
THE DEMAND OF THE PRODUT THEY SUPPLY
THE NUMBER OF SUBSTITUTE PRODUCTS BEING SUPPLIED BY OTHER FIRMS
HOW MUCH THE FIRMS ECONOMIC ACTIVITIES DEPEND ON WHAT THEY ARE SUPPLYING
THE NUMBER OF OTHER SUPPLIERS PROVIDING THE SAME PRODUCT

Question 8

EXPLAIN POWER OF BUYERS AND SOME FACTORS THAT INFLUENCE IT

Answer 8

BUYERS HAVE THE POWER TO INFLUENCE THE QUANTITY AND THE PRCE OF PRODUCTS BEING SOLD BECAUSE THEY CAN BARGAIN ON VOLUME OR SWITCHING COSTS OR THEY CAN FIND SUBSTITUTES
FACTORS:
HOW MUCH ACCESS TO INFORMATION THE BUYERS HAVE
THE POSSIBILITY TO SUBSTITUTE PRODUCTS
HOW HIGH OR LOW THE SWITCHING COSTS ARE TO A RIVAL FIRM

Question 9

EXPLAIN THREAT OF NEW ENTRANTS AND SOME DETERMINANTS OF ENTRY BARRIERS

Answer 9

TO DEFEND THEMSELVES FROM NEW COMPETITORS FIRMS MUST FIND A WAY TO CREAT PROTECTION BARRIERS ( SUCH AS CUSTOMER LOYALTY, PRODUCT DIFFERENTIATION AND COST ADVANTAGE)
SOME ENTRY BARRIERS:
ECONOMIES OF SCALE
COST AND RESOURCES DISADVANTAGES

Question 10

EXPLAIN THREAT OF SUBSTITUTES AND SOME FACTORS THAT INFLUENCE

Answer 10

FIRMS ARE ALWAYS WORRIED THAT SUBSTITUTE PRODUCTS OR SERVICES MAY DISPLACE THEIR OWN. THREAT OF SUBSTITUTION IS HIGH WHEN RIVAL FIRMS OFFER MORE ATTRACTIVE AND/OR LOWER COST PRODUCTS
IF THE COST OF SWITCHING IS HIGH, THEN THE THREAT WILL BE LOW

Question 11

WHAT ARE KEY SUCCESS FACTORS

Answer 11

KEY SUCCESS FACTORS ARE REQUIREMENTS FOR SUCCESS THAT WILL IMPACT FIRM’S STRATEGY TOGETHER WITH THE STRUCTURE.
TO IDENTIFY THEM IS NECESSARY TO ANALYZE THE DEMAND AND FIND OUT WHAT CUSTOMERS REALLY WANT, HOW INTENSE COMPETITION IS AND HOW TO OBTAIN COMPETITIVE ADVANTAGE