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Business Strategic

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Submitted By medo11
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Business STRATEGIC

1. How can a company overcome the limitations of being in a fragmented industry?
Fragmented industry consists of many small and medium sized companies or firms. There is few scale economies and hence large company cannot have advantage overall advantage. Furthermore the lack of scale economies low barriers to entry characterize many fragmented industries and new entry keeps the industry fragment.. Similarly transportation cost may keep the industry fragmented.
Entrepreneurs are eager to gain the cost advantage of pursuing a low cost strategy of a fragmented industry. The required rate of return from consolidating industry is often huge.
A fragmented industry is a sector of business without a distinct industry leader to control market trends. This business phenomenon happens frequently in local markets with small businesses, including restaurants, auto repair shops and construction companies. A small business owner can use several proactive strategies to overcome industry fragmentation and begin to distinguish her company in the minds and wallets of consumers.
A fragmented industry is an entrepreneur's dream, and offers unbelievable opportunity compared to more homogeneous industries. Restaurants, Home Improvement Outlets and Homebuilders, and other Mom-and-Pop endeavors are good examples. Tons of small competitors and no consistent supply chain.
Compare this to the a handful of competitors serving homogeneous markets and all using the same 'stuff' made the same way from the same handful of suppliers. There is really very little Ford to do to compete against GM.
The cost of entry in a fragmented industry is typically comparatively very low, and , and fragmented industries are nowhere near as regulated as homogeneous industries. There are limitations. If you're

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