Preview

Term Paper on Competition Demystified & Jack Welch: General Electric’s Revolutionary

Good Essays
Open Document
Open Document
1406 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Term Paper on Competition Demystified & Jack Welch: General Electric’s Revolutionary
Competition Demystified

1. Which one of the Michael Porter’s 5 forces more important than the others according to Bruce Greenwald and Judd Kahn? Which ones are the truly competitive advantage’s elements?

Bruce Greenwald and Judd Kahn’s opinion related to Michael Porter’s forces defined that the truly durable competitive advantages arise from industry competitors. It is comes from rivalry among the existing firms. The interaction of supply and demand advantages is the source, from the linkage of economies of scale with customer captivity.

The competitive advantage of economies of scale depend not on the absolute size of the dominant firm but on size difference between it and its rival, that is, on market share. If the entrants have equal access to customers as the incumbents have, it will be able to reach the incumbents’ scale. A market in which all firms have equal access to customers and common cost structures, and in which entrants and incumbents offer similar products on similar terms, should divide more or less evenly among competitors.

For economies of scale to serve as a competitive advantage, the, they need to be coupled with some degree of incumbent customer captivity. If an efficient incumbent matches his competitors on price and other marketing features, then, the customer captivity will retain its dominant share of markets.

So the combination of even modest customer captivity with economies of scale becomes a powerful competitive advantage.

2. Describe the 3 sources of competitive advantage other than Government Protection, Patents, Superior access to information, etc.

Cost
The incumbent can lower prices to a level where it alone is profitable and increase its share of the market or eliminate all profit from competitors who match its prices. If we could have the cost leadership by having lower cost structure than competitors, who could be caused by due either to proprietary technology or special resources that cannot be hired

You May Also Find These Documents Helpful

  • Satisfactory Essays

    ECON205 Homework09 S09

    • 6135 Words
    • 72 Pages

    Monopolistic competition has the attribute that there are many firms competing for the same group of customers.…

    • 6135 Words
    • 72 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Rize Documentary

    • 528 Words
    • 3 Pages

    • Cost leadership is an organization’s ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste and tight cost control.…

    • 528 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Comm 210

    • 3731 Words
    • 15 Pages

    Economies of scale: Large companies can produce products at a much lower cost than small ones because the cost per unit drops as the volume of output rises…

    • 3731 Words
    • 15 Pages
    Good Essays
  • Powerful Essays

    Unit 3: Albatross Anchor

    • 1472 Words
    • 6 Pages

    A company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods (Hindle, 2008). As a company grows and production units increase, a company will have a better chance to decrease its costs. According to theory, economic growth may be achieved when economies of scale are realized (Heakal, 2009). There are two types of economies of scale – external and internal. External are economies that benefit a firm because of the way in which its industry is organized. Internal are cost savings that accrue to a firm regardless of the industry in which it operates (Hindle, 2008). Economies of scale give companies access to a larger market by allowing them to operate with better geographical reach.…

    • 1472 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Examples of economies of scale at Yum! Yum! Gourmet Popcorn Company can be exercised through the purchase of ingredients in higher concentrations. These larger orders decrease shipping prices and fixed-costs associated with production. Additional examples can also be experienced by expanding into wholesale markets. The increased volume of sales would also decrease shipping and storage costs associated with products. In the latter example, the sales volume would have to occur at a level high enough to justify increases wages paid and equipment maintenance. Typically economies of scale are best implemented by larger companies able achieve and benefit from the volume of operations required to substantiate the increased investment.…

    • 443 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Week 3 Assignment

    • 497 Words
    • 2 Pages

    e How would expanding the business affect the economies of scale? When would you have constant returns to scale or diseconomies of scale? Describe your answer.…

    • 497 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Gooshoo

    • 253 Words
    • 2 Pages

    Economies of scale are the cost savings associated with a larger production scale (size) of certain product, the larger the production scale, the lower the per unit product cost. Manufacturing 1,000 laptops is cheaper than manufacturing 100 laptops. This means that economies of scale arise on the supply side of the market, on the savings from a larger production batch with the same fixed resources, on gains from improved bargaining power with suppliers.…

    • 253 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Week 2 Quiz

    • 442 Words
    • 2 Pages

    Economies of scale in an industry refers to Savings that companies within the industry achieve due to increased volume…

    • 442 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    An industry can be defined as a group of companies offering products that are closely substituting for each other in order to satisfy customers. Competitive advantage can be defined as when a firm sustains profit which exceeds the company’s average; it automatically possesses competitive advantage over rivals. The business strategy for most companies is to achieve a sustainable competitive advantage. This essay aims to discuss why firms must choose between types of competitive advantages using an industrial example.…

    • 1472 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Michael Porters competitive force model is used to displays how information technology can upgrade the competitiveness of a corporation. It is also used to develop strategies to increase competitive edge. Competitive strategy must grow out of a sophisticated understanding of the structure of the industry and the industry is constantly changing. Regardless of the industry, Michael Porters five forces will bring forward your strengths and weakness. The five forces are: The threat of new entrants, the threat of substitute products, the bargaining power of suppliers, the bargaining power of buyers and the rivalry amongst the existing competitor’s. These five forces determine industry profitability because they shape the prices firms can change, the costs they have to bear and the investment required to compete in the industry. According to the five forces Wal-Mart’s certain competitive condition can be clearly seen.…

    • 2613 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    (2) Entry: Scale Economies concentrate market and prevent rivals from entering the market. Startup firms incapable of achieving MES can make market entry only at cost disadvantage. Firms with higher economies of scale would…

    • 995 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Michael Porter’s competitive forces model is a well-known framework for analyzing competitiveness. Competitive force model is used to develop demonstrates on how Information Technology can upgrade the competitiveness of a corporation. It is also used to develop strategies to increase competitive edge. Competitive strategy must grow out of a sophisticated understanding of the structure of the industry and it is changing. In any industries, whether it is domestic or international, the nature of competition is embodied in five competitive forces: (1) the threat of new entrants, (2) the threat of substitute products, (3) the bargaining power of suppliers, (4) the bargaining power of buyers, and (5) the rivalry among the existing competitors (Richard, E, pg. 16).…

    • 2514 Words
    • 11 Pages
    Powerful Essays
  • Satisfactory Essays

    Mr Jack Koops

    • 327 Words
    • 2 Pages

    Firms grow in size as the result of multiple strategies used, such as, horizontal integration, organic growth and many other ways. The reasons that give the firms the motivation to do this is to achieve economies of scales, business objectives, monopoly power and the minimum efficient scale in order to maximise their profit.…

    • 327 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    uk airlines

    • 686 Words
    • 3 Pages

    Michael Porter's famous Five Forces of Competitive Position model provides a simple perspective for assessing and analysing the competitive strength and position of a corporation or business organisation. Here is a brief introduction to Porter and his work in this space.…

    • 686 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Monopolistic Competition

    • 1349 Words
    • 6 Pages

    A market is an economic environment in which buyers and sellers in an industry operate. There are four degrees of competition in the market: monopoly, oligopoly, monopolistic competition and perfect competition. As firm numbers rise from one single firm dominating the market in a monopoly to many small firms in perfect competition, the less influence an individual firm’s supply has on total supply and therefore on price because it competes with a large number of other firms.…

    • 1349 Words
    • 6 Pages
    Better Essays

Related Topics