one that both flagship airlines will likely guard intensely. Ryanair’s entry into this route represents a minor loss of revenue in the near term but a potentially major loss of revenue in the future if they expand. In addition‚ Ryanair’s successful entry could entice other carriers to enter this route‚ further eroding profits. Air Lingus and BA both stand to lose tremendously if they do not prove there are high barriers to entry for Ryanair and future would-be competitors. Although both BA and Air
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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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ANALYSIS OF SHISEIDO The Shiseido Group was established in 1872 and is headquartered in Tokyo‚ Japan. The company is engaged in the cosmetics and toiletries industry. The group also has massive interests in the boutique‚ restaurant‚ salon‚ fine chemicals‚ pharmaceutical and beauty foods sectors. Shiseido is the largest manufacturer of cosmetics in Japan with more than 20 brands. The firms product offering consists of 3 product lines and these are the Skincare range‚ the Pureness range and the Beneficence
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PORTERS FIVE FORCES ANALYSIS OF SONY CORPORATION 1. Threats of new Entry (Low): Electronic industry needs huge amount of capitals. High scale economy and constant innovation is another barrier to a new entrant. Moreover‚ the government policy acts as entry barrier for a new company. 2. Bargaining Power of Buyer (High): For Sony Corp. product the bargaining power of buyers very high as there is almost no switching cost from one brand to another. And the information technology provides the
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are namely; Risk of Entry by potential competitors‚ Rivalry amongst established companies‚ Bargaining power of buyers‚ bargaining power of suppliers‚ Substitute products and Competitors. A strong competitive force can be regarded as a threat as it decreases profits while a weak competitive force can be regarded as an opportunity as it allows companies to earn greater profits. A Cellular Network Providers industry will be used to explain these forces. • Risk of entry by potential competitors
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forces model. The model includes threat of potential new entrants‚ threat of rivalry in the industry‚ threat of suppliers‚ threat of suppliers‚ threat of buyers and threat of product substitution. [pic] Rivalry in the industry Because of low entry barriers‚ the market is full of competitors. Yahoo! Auctions is one of the example competitors for eBay eBay continues to appeal to their customers and provide the best possible service at the lowest price. They are also continuing to expand
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Part B: Industry Analysis There are five competitive forces model that determine an industry’s profitability. These five forces are entry barrier‚ threat of substitutes‚ rivalry among competitors‚ bargaining power of suppliers and buyers. [pic] 1. Entry Barrier One of the barriers for competitor entry telecommunication industry is high capital investment. Companies in this industry required high fixed costs and spend relatively large on network equipment and maintain development. Besides
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Supplier power force can also assume importance in this industry. Since there are many players and the product is fairly standardized‚ there is not much room for negotiation. Last but not the least‚ barriers to entry/threat of entry as a force plays a major role as well. In terms of entry barriers‚ factors like Patents and proprietary knowledge‚ Organizational economies of scale come in to play and from exit barriers standpoint‚ highly specialized assets and high exit costs deter any plans to abandon
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Lecture 5 External Environment Parts of these slides are material developed and copyrighted by Johnson‚ Scholes & Whittington (2006) and Lynch (2006) Sustainable Competitive Advantage • One of the main purposes of analysing competitors is to explore where and how sustainable competitive advantage (SCA) can be generated • Public service and not-for-profit organisations may also wish to explore SCA as they may be in competition for finance from external bodies • SCA will probably require
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the concentration or market power of firms as measured by their market shares‚ the purchasing behavior of buyers‚ the product type including differentiation or degree of homogeneity‚ the substitutability of the product‚ the elasticity of demand‚ the entry and exit barriers‚ the control over market price or output‚ and the level of
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