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SEVI 3013 Final Exam Uark | Questions with 100% Correct Answers | Verified | Latest Update 2024
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SEVI 3013 Final Exam Uark | Questions with 100% Correct Answers | Verified | Latest Update 2024
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SEVI 3013 Final Exam Uark |Questions with 100% Correct
Answers | Verified | Latest Update
2024
Threat of New Entrants - ✔✔Identifying new entrants is important because
they can threaten the market share of existing competitors
The likelihood that firms will enter an industry is a function of two factors:
barriers to entry and the retaliation expected from current industry participants
Barriers to Entry - ✔✔-Economies of Scale
-Product Differentiation
-Capital Requirements
-Switching Costs
-Knowledge Requirements
,Bargaining Power of Suppliers - ✔✔Suppliers can exert power over
firms competing within an industry by
-Increasing prices
-Reducing the quality of their products
A supplier group is powerful when: - ✔✔-It is dominated by a few large
companies and is more concentrated than the industry to which it sells
-Satisfactory substitute products are not available to industry firms
-Suppliers' goods are critical to buyers' marketplace success
Bargaining Power of Buyers - ✔✔To reduce their costs, buyers bargain for:
-Higher quality
-Greater levels of service
-Lower prices
,Customers (buyer groups) are powerful when: - ✔✔-They purchase a
large portion of an industry's total output
-The sales of the product being purchased account for a significant portion of
the seller's annual revenues
-They could switch to another product at little, if any, cost
Threat of Substitute Products - ✔✔Goods or Services from outside a given
industry that perform similar or the same function as a product that the
industry produces. (Ex. Plastic Containers vs. Glass containers)
Rivalry Among Competing Firms - ✔✔-Numerous or Equal Balance Competitors
-Slow Industry Growth
-High Fixed Costs or High Storage Cost
-Lack of Differentiation or Low Switching costs
, -High Strategic Stakes
-High Exit Barriers
Switching Costs - ✔✔The one-time costs customers incur when they buy from
a different supplier
If Switching costs are high, a new entrant must attract buyers by offering either: -
✔✔-A substantially lower price
-A much better product
Strategic Groups - ✔✔A set of firms emphasizing similar strategic dimensions
and using a similar strategy
Competitive rivalry is greater within a strategic group than between strategic
groups
Analyzing strategic groups can be helpful in diagnosing ________ of firms
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