Week 2 Flashcards
1
Q
5 forces
A
- Entry
- Supply
- Buyers
- Substitues
- Rivalry
2
Q
Other factors of industry (4)
A
- Industry growth rate
- Technology and innovation
- Government
- Complements
3
Q
Entry barriers (6)
A
- Economies of scale
- Benefits of scale
- Capital requirements
- Customer switching costs
- Incumbency advantages
- Restrictive government policy
4
Q
When is power of suppliers high? (6)
A
- Concentration
- No heavy dependence for revenues
- Switching costs
- Differentiated products
- No subsitute
- Threat of forward integration
5
Q
When is power of buyers high? (4)
A
- Few large buyers
- Standardized or undifferentiated products
- Few switching costs
- Threat of backward integration
6
Q
When is threat of substitutes high?
A
- Attractive price-performance trade-off
- Cost of switching to the substitute
7
Q
When is rivalry high existing competitors (4)
A
- Competitors are numerous or roughly equal in size and power
- Industry growth is slow
- Exit barriers are high
- Rivals are highly committed to the business and have aspirations for leadership
8
Q
Why is price competition more likely to erode profitability?
A
It decreases customer value and supports lower prices
9
Q
Strategic management
A
Direction of organizations
10
Q
Why economics in strategic management? (5)
A
- The need to interpret performance data
- The experience curve
- The problem of persistent profit
- The changing nature of economics
- The changing nature of business schools
