Porter Five Forces
Revision
Q1) Porter`s Five Forces
Strategies for overcoming the influencers. * Threat of new entrants * A way of trying to eliminate threat of new entrants would be to create economies of scale. This approach would make it harder for new entrants to reach high scale production, as they would have higher costs. This is what Samsung and Apple are trying to do at the moment, by building large economies of scale. But at the same time, ZTE a Chinese company, started selling the cheapest Android phones in 2010 and now have 2% of the smartphone market share. Obviously, as this industry had an immense growth in the recent years, companies such as ZTE started making smartphones as this industry was developing, therefore the company had the opportunity to grow with the industry. * Another way would be patenting new technologies. Therefore, new companies that would want to use patented technologies would have to pay for them, rising their costs. * The experience curve, would most likely come naturally, because experienced companies in an industry would be more cost effective than new entrants as they would have improved their processes. * Sometimes new entrants buy another company just because the barriers are too high. For example, Vodafone has a smartphone branded Vodafone, as selling it under a different name would not sell. * In other industries, people have managed to enter an industry through on-line retailing (Amazon). * Price wars could also increase the threat of new entrants * In order to access this industry Nokia and Microsoft (Microsoft previously acquired Skype for 10 bn US dolars) formed an alliance by having a new Operating System called Windows Phone. As the consumers do not trust these two brands, they are trying to add value to their homes by integrating in the operating systems social networks such as Facebook, Twitter and Linkedin. Furthermore, they have the official Microsoft Office app and image stabilisation
Q1) Porter`s Five Forces
Strategies for overcoming the influencers. * Threat of new entrants * A way of trying to eliminate threat of new entrants would be to create economies of scale. This approach would make it harder for new entrants to reach high scale production, as they would have higher costs. This is what Samsung and Apple are trying to do at the moment, by building large economies of scale. But at the same time, ZTE a Chinese company, started selling the cheapest Android phones in 2010 and now have 2% of the smartphone market share. Obviously, as this industry had an immense growth in the recent years, companies such as ZTE started making smartphones as this industry was developing, therefore the company had the opportunity to grow with the industry. * Another way would be patenting new technologies. Therefore, new companies that would want to use patented technologies would have to pay for them, rising their costs. * The experience curve, would most likely come naturally, because experienced companies in an industry would be more cost effective than new entrants as they would have improved their processes. * Sometimes new entrants buy another company just because the barriers are too high. For example, Vodafone has a smartphone branded Vodafone, as selling it under a different name would not sell. * In other industries, people have managed to enter an industry through on-line retailing (Amazon). * Price wars could also increase the threat of new entrants * In order to access this industry Nokia and Microsoft (Microsoft previously acquired Skype for 10 bn US dolars) formed an alliance by having a new Operating System called Windows Phone. As the consumers do not trust these two brands, they are trying to add value to their homes by integrating in the operating systems social networks such as Facebook, Twitter and Linkedin. Furthermore, they have the official Microsoft Office app and image stabilisation