Vorlesung 2 - Industry Analysis Flashcards
What are the main objectives of industry analysis?
1) Understand how industry structure drives competition, determining profitability
2) Assess industry attractiveness
3) Forecast future profitability based on industry structure changes
4) Formulate strategies to improve profitability
What are Porter’s “Five Forces”
1) Rivalry among existing firms
2) Bargaining power of buyers
3) Bargaining power of suppliers
4) Threat of new entrants
5) Threat of substitutes
What factors determine the bargaining power of buyers?
1) Buyer’s price sensitivity
2) Size and concentration of buyers relative to sellers
3) Differentiation of the purchased item
4) Ability of buyers to backward integrate
What is an oligopoly? Name 4 characteristics
An industry with a few firms, significant entry and exit barriers, potential for product differentiation, and imperfect information
Example: The “Big Four” accounting forma (pwc, KPMG, Deloitte, EY)
What increases rivalry among established competitors?
1) High concentration (few, large firms)
2) Low product differentiation
3) High fixed costs relative to variable costs
4) Excess capacity and exit barriers
What is a strategic group?
A group of firms within an industry following similar strategies, e.g Ferrari and Lamborghini as performance car producees
How does the Five Forces model view threats versus opportunities?
The model emphasizes threats but notes that intense rivalry can also provide opportunities for innovation and collaboration, such as through strategic alliances
What are key success factors in industry analysis?
1) Understanding customer needs
2) Analyzing competition
3) Gaining a superior competitive position
How do the “Five Forces” assist in strategy development?
By analyzing industry structure to identify opportunities and threats, understand competition, and strengthen positioning within the industry
