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Organisational Change Management

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1.0 Barriers to entry
Porter's five forces model is often used to access an industry's attractiveness. pg 59. The degree of the barriers to entry lead outcomes at variance. Following are the barriers to entry and also the crucial factors that new entrant not to be overlooked.
The large economies of scale is the major barrier to entry for entrant. With the incumbents controlling the productions, quantity of cars that produced are overwhelmed; in results, low production costs. However, new entrant will be required to produce similar amount of cars to reduce the production costs. It might be difficult for the new entrant as the demand might be not as positive than incumbents.
Following by the absolute cost advantage, in comparison to incumbents, new entrant could be losing at the beginning stage because the inexperienced factor could be lead to higher production costs.
For new entrant that performs exceptionally brilliant, they would need to face expected retaliation as the incumbents will not be intimidated and will be follow up with forms of full force revenge to protect their positions in the automotive industry. Price war would occurs whereby the incumbents that have lower unit costs per car, able to slash the price to the minimum margin. Reality hits new entrant when they need to possess the higher capital requirements in order to compete or in the attempt of matching up with the incumbents. The consequence if new entrant failed to do so, will be facing strategic drift not excluding exit of the industry.
There are regulations, mainly in conserving the environment well being; implemented by countries around the world. Especially in US, the government is very concerned and stringent on the mpg requirements. New entrant must be prepared to pay for the high penalty incurred should they failed to meet the standard. In addition, they will need to develop

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