OBS 320: Chapter 4‚ Exploring the External Environment: Macro and Industry Dynamics Leave out: The Value Curve (P. 152-156); and When industry Divide and Collide (P.163-164) 1. Explain the importance of the external context for strategy and firm performance (P. 130-132) A. The External Context of Strategy (Figure 4.1) B. The External Context of Strategy (Explained) It is crucial that the external environment is thoroughly understood in order to formulate an effective
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Hilton Hotels‚ Marriott International‚ Inc.‚ Global Hyatt Corporation‚ and MGM Mirage. They have built a brand image and equity that intensifies rivalry in the industry. Since all of the actors in the hotel industry made huge investments‚ their exit barrier is high that adds more fuel to rivalry in the hotel industry. Threat of Substitutes: In the overall hotel substitutes category‚ there are several substitutes for Starwoods such as timeshares‚ staying at friends and
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•Registration fee + Cost Price + Road Tax + COE + additional registration fee (140% of OMV) and customs duty (31% of OMV). Substitution MRT & LRT Trains‚ Buses‚ Taxis Rental services •Avis •Budget •Hertz Force 1: Barriers to entry Barriers to entry measure how easy or difficult it is for new entrants to enter into the industry. This can involve for example: * Cost advantages (economies of scale‚ economies of scope) * Access to production inputs and financing‚ *
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other industries. Besides‚ this industry has created a government policy’s barrier by Bank Negara Malaysia (BNM) so there is essential to get approval from the Federation of Goldsmiths and Jewellers Association of Malaysia (FGJAM). Furthermore‚ the competition in this industry is strong as there are listed jewelry companies including PKHB and many private companies such as Habib Jewels‚ Wah Chan and so forth. High barriers of entry‚ such as the growth of established companies in the industry and high
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factors which affect the entry to the cosmetic industry by firms. These factors can be briefly analyzed using the Porter Five forces analysis. They include the threat of substitutes‚ threat of new entry‚ bargaining power of customers and suppliers as well as intensity of rivalry in the industry. Threat of new entry This factor analyzes the ease with which firms may enter into an industry. The cosmetic industry has a low threat of new entrants. The first is the huge costs of entry. Developing unique
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retail building-supply industry in Oct 2002. The industry is dominated by two firms: Home Depot‚ with strong operating performance and Lowe’s‚ with strong stock-market performance. The industry is highly consolidated with two major players‚ high barriers to entry and with the independent hardware stores struggling to remain competitive. This is also reflected in Exhibit 1‚ Home Depot’s and Lowe’s market shares were 22.9% and 10.8% respectively. Even though it is expected that in the longer run both the
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can be used. Porter (1980:3) states that “competition in an industry depends on five basic competitive forces”. As seen below in figure 1. Figure 1. Threat of new entrants Porter (1980:7) states that there are “six major sources of barriers to entry”; economies of scale‚ product differentiation‚ capital requirements‚ switching costs‚ access to distribution channels and government policy. “New entrants to an industry bring new capacity and a desire to gain market share that puts pressure
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political‚ technological factors. In order to create their strategic action plan‚ the company must also have a clear understanding of its competitive forces included in the industry environmental factors. The factors the company must look at are the entry barriers including capital requirements and policies regarding distribution channels. Remote environmental factors are created without the actions of the company. These factors may present the organization with opportunities‚ threats‚ and constraints that
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PORTER’S FIVE FORCES MODEL Threat of New Entrants The threat of new entrants is low because of creating a large distribution network like that of FreshDirect is expensive; a strong distribution network is required‚ as well as advanced technology. Entry barriers are high as well. Geographic factors would limit competition. Bargaining Power of Buyers For FreshDirects‚ their customers’ loyalty is essential for them‚ and for their business in order for it grow. They have a low dependency on distributors
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Express‚ Emery Worldwide‚ RPS‚ TNT Express‚ Worldwide‚ and US Post Service | Keen competition with big competitors as they account for the lion’s share of the market | Entry barriers | * Economy of scale * CAPEX on IT‚ facilities‚ aircrafts and airports‚ trucks‚ * Brand loyalty‚ licensing‚ customer networks | High entry barrier to the industry because of large economy of scale‚ high CAPEX‚ and dominating market shares of big players | Substitutes | * Emails for letters * General post
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