...COMPETITORS Based on research done, our major competitor in the fuel-based car market will be the Nissan Qashqai as it’s arguably one of the top selling crossover cars in the UK. The Nissan Qashqai is the finest small SUV on the market. It is economical, classy inside and extremely refined. It's also one of the most practical small SUVs no wonder its sales figures are really high compared to others in the market. It's also bagged the 2014 Car of the Year award. Despite all these its weaknesses are that some versions are seen as pricey and it doesn’t have the best driver experience. MANUFACTURING | DISTRIBUTION | SUPPLIERS | -The car is built at Nissan Motor Manufacturing (UK) Ltd or NMUK. Located in Sunderland, Tyne and Wear, United Kingdom-Some models are built in Nissan’s Russian plant in Sunderland to increase production capacity in their UK plant. | -It’s sold in: Japan, Middle east, North America, New Zealand, Singapore, United Kingdom, Russia-Uses both direct and indirect distribution channels. i.e they have showrooms in major divisional headquarters which they use as direct distribution channels and in places where they don’t have showrooms, it uses its chain of authorized dealers to sell its cars (indirect distribution channel). | -Has over 5000 suppliers | NISSAN’s STRENGTHS AND WEAKNESSES Strengths * Global brand * High global financial position * Innovative culture Weaknesses * Overdependence in overseas market * Product recalls ...
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...Kampala International University Abdifatah Adan Egeh Course work material +256718275925 caloolgeele@hotmail.com Introduction The analysis of barriers to entry and exit is fundamental to the assessment of market power and market efficiency. A firm or firms may exercise market power for a significant period of time only if barriers to new entry exist. Thus in determining whether or not a proposed merger is against the public interest, or whether a firm (or firms) is abusing monopoly or market power in antitrust cases, analysis of entry conditions is of primary importance. One might therefore expect to see rather extensive and sophisticated analyses of entry conditions, or barriers to entry, in monopoly and merger cases that come before competition authorities in the United States, United Kingdom, or member states of the European Union (EU). One might also expect that competition authorities would have placed a great deal of emphasis and effort on achieving a coherent and consistent framework for the analysis of entry barriers in a manner that makes use of the latest thinking on the subject by industrial organization economists. However, until very recently no competition authority that we are aware of has attempted to formulate a coherent and detailed framework for the analysis of barriers to entry, despite the significant degree of effort that has been put into clarifying the related problems of market definition and the measurement of monopoly or market power....
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...Eastern Michigan University DigitalCommons@EMU Senior Honors Theses Honors College 2009 U.S. Business and Global Barriers to Entry Caitlin Long Follow this and additional works at: http://commons.emich.edu/honors Recommended Citation Long, Caitlin, "U.S. Business and Global Barriers to Entry" (2009). Senior Honors Theses. Paper 167. This Open Access Senior Honors Thesis is brought to you for free and open access by the Honors College at DigitalCommons@EMU. It has been accepted for inclusion in Senior Honors Theses by an authorized administrator of DigitalCommons@EMU. For more information, please contact libir@emich.edu. U.S. Business and Global Barriers to Entry Abstract An exploratory view of barriers to entry in countries of significance to U.S. companies, this thesis provides a comprehensive overview of prevalent business strategies of U.S. trading partners as well as a forecast of their international business policies. Diverse macro-environmental variables, such as economy, culture, and regulations result in varying barriers to entry for U.S. based firms to conduct business in U.S trading partners’ countries. This thesis will determine how these macro-environmental factors foster or stunt growth and strategies governments employ to attract businesses. Degree Type Open Access Senior Honors Thesis Department Marketing First Advisor Harash Sachdev Keywords International trade, Foreign trade regulation, Investments, Foreign China, Investments...
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...RTE Cereal Industry Barriers to Entry Giovanni Massari 1) Economies of Scale: with regards to Economies of Scale, we have Product-Specific ones with regard to the fact that there is a minimum efficient scale of production in the industry, without which firms wouldn’t survive in the environment; requirements, in this case, are 75 million pounds of cereals per year to be efficient. Other scale economies can be Multi-Product ES (“Economies of Scope”); indeed, different types of cereals can be produced in a very similar way, not requiring different production facilities, but leveraging the existing ones. The same can also be applied to packaging/bagging, which is the main source of Economies of Scale, because the Big Three use the same package within the firm for the various cereals they produce, with little differentiation. Finally, there are scope economies in advertising, since there’s the possibility of leveraging on it for new product introductions (“Brand Extension”), decreasing costs related to it – even though they’re still high, ¼ of the entire food industry’s expenses. 2) Experience Curve advantages: we have that the Big Three encounter Experience Curve advantages whenever trying to develop a brand extension or a new product, because of the cost reduction faced due to knowledge of basic processes needed for production. This, in combination with the existence of proprietary technology (see below, section 7), increases new entrants’ difficulty in entering the market...
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...How do exit and entry barriers affect internal rivalry? a. Entry barriers: When new firms join an industry, it hurts the other firms that where there before by cutting into their market share and by intensifying internal rivalry, which ultimately leads to a decline in price cost margin. In essence, anytime a firm joins, the rest of them lose, to some degree, market share and revenue. The entry barrier becomes a factor that helps to understand how many firms are competing against each other. The lower the entry barrier, the more new firms present in the market and the more fronts of competition to attack (in order to gain market share and increase revenue). The higher the entry barrier, the less new firms present in the market, but still they are fronts to attack. b. Exit barriers: High exit barriers place a high cost on abandoning the product. This type of barrier causes a firm to remain in an industry, even when the venture is no longer profitable. If the industry’s fixed costs are high, competitive rivalry will be intense. A common exit barrier is asset specificity. When the plant and equipment required for manufacturing a product is highly specialized, these assets cannot easily be sold to other buyers in another industry. Low exit barriers would reduce the number of competitors a firm is competing against, which means that it increases the opportunity of gaining more market share and revenue, by capturing what others left when they exit the market. In conclusion...
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...With the use of examples explain the various barriers to entry to a market and how these barriers might affect market structure Barriers to entry are designed to block potential entrants from entering a market profitably, they seek to protect monopoly power and usually have the effect of making a market less contestable. In a perfectly competitive market barriers to entry are not allowed as otherwise the market would not be perfectly contestable as one firm will have an advantage over another. One barrier to entry in a market is research and development. Heavy investment into research and development from large firms can deter other firms from entering into a market. Research and development also goes into developing new products such as Dyson creating the bag less vacuum cleaner, this leads to firms acquiring patents, where the firm has legal protection over a design or a product for twenty years. Patents are very good at creating monopolies as they restrict entry into certain markets, as in my previous example with the bag less vacuum cleaner, Hoover tried to copy this idea however were taken to court by Dyson leading to Hoover having to take their product off the market and paying substantial fees to Dyson. This therefore led to a monopoly on the bag less vacuum cleaner; therefore Dyson had complete market power and could increase the prices of their products. Another barrier to entry also related to research and development is the R&D that goes into making the...
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...rivalry among existing firms, the lesser danger of potential entrants and higher barriers to entry, lesser substitutes for the firm’s products and a weaker bargaining power of the consumers and suppliers. Competitive incumbent firms or existing businesses in a particular market adopts strategic entry deterrence to discourage potential entrants from entering into competition in the market. These actions from the existing companies create and strengthen barriers to entry for the industry for new entrants. However, this course of action causes market to lose competition and some might even be illegal. Not all industries and not all companies respond in the same way, the strength and aggression of the response varies accordingly to the current market trends, conditions and consumer behaviour. In this essay, we will discuss on several strategic actions taken by the incumbent firms to create, maintain or increase deterrence on new and potential entrants and thereafter, analyzing the credibility of each action. There are many types of barriers to entry into a market, including factors like high capital costs, differentiated product, costs of switching, distribution network, economies of scale, suppliers, barriers to exit and legal and government created barriers. High capital cost: In an industry that demands a larger capital investment during the starting up process, it will act as a barrier to entry for most potential entrants unless those who have a competitively high initial...
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...cultural values greatly influenced by Confucianism and western cultures. When analyzing Japan from Hoftede Cultural dimension point of view it is clear that is low power distance culture with high collectivism, high masculinity, high uncertainty avoidance, and long-term oriented. This tendencies are reflected in marketing practices and consumer behavior, it also has a great impact on management as long-term oriented employment, high uncertainty avoidance, and long-life employment are expected from both employers and employees. Also managers have to be aware there is preference to local and high quality products, however there are some entry barriers and large competitors. After TRU started its international expansion in 1984 it had to rapidly learn to adapt to different competitive retail situations that it entered. The main cultural barrier TRU faced when entering the Japanese market was a cultural employment obstacle, due to the high uncertainty avoidance and long-term oriented characteristic of the culture there were challenges in...
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...is to analyze the market structures to help make you aware of the different categories of market structures within the businesses. “Perfect competition is the market structure in which there are many sellers and buyers, firms produce a homogeneous product, and there is free entry into and exit out of the industry. There are six basic assumptions for the model of perfect competition.” (Amacher & Pate, 2012) Firms in the perfect competition are known as price takers. The products that each firm produces are usually the same, homogeneous. A good example of this is wheat; all products are exactly the same whether you buy it from a farmer next door or from the farmers market. With many sellers in this market, no decisions that a seller makes will affect the price of the product. A firm in this market as many buyers as it does sellers, no one buyer has any market power. It is easy to get entry into and exit out of the market and no one the firms or individual buyers have no influence over price making it perfectly competitive. “In monopolistic competition market structure, the industry consists of a large number of firms, each producing a differentiated product. A very important assumption is that entry into this industry is relatively easy. New firms can enter the...
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...Introduction: In 1979, Harvard Business Review published “How Competitive Forces Shape Strategy” by a young economist and associate professor, Michael E. Porter. It was his first HBR article, and it started a revolution in the strategy field. In subsequent decades, Porter has brought his signature economic rigor to the study of competitive strategy for corporations, regions, nations, and, more recently, health care and philanthropy. “Porter’s five forces” have shaped a generation of academic research and business practice. With prodding and assistance from Harvard Business School Professor Jan ‘ Rivkin and longtime colleague Joan Magretta, Porter here reaffirms, up-dates, and extends the classic work. He also ad-dresses common misunderstandings, provides practical guidance for users of the framework, and offers a deeper view of its implications for strategy today. In essence, the job of the strategist is to understand and cope with competition. Often, however, managers define competition too narrowly, as if it occurred only among today’s direct competitors. Yet competition for profits goes beyond established industry rivals to include four other competitive forces as well customers, suppliers, potential entrants, and substitute products. The extended rivalry that results from all five forces defines an industry’s structure and shapes the nature of competitive interaction within an industry. As different from one another as industries might appear on the surface, the underlying...
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...For the exclusive use of G. Alvarado, 2015. 9-707-493 REV: AUGUST 13, 2007 MICHAEL E. PORTER Understanding Industry Structure The essence of the job of the strategist is to cope with competition. The arena in which competition takes place is the industry in which a company and its rivals vie for business. Each industry has a distinctive structure that shapes the nature of competitive interaction that unfolds there. Understanding the underlying structure of a company’s industry, now and in the future, is a core discipline in strategy formation. On the surface, every industry is different. Consider the global automobile industry, the worldwide market for art masterpieces, the booming private equity industry, and the heavily regulated health-care delivery industry in Europe. At one level, these industries appear to have little in common. Industries also differ in another crucial aspect: they register sharply different levels of average profitability in the long run. For example, Exhibit 1 shows a histogram of long-run return on invested capital in the United States for more than 400 industries. The most profitable industries generate much higher returns than the least profitable. Equally significant differences arise in other countries, both advanced and emerging. To understand industry competition and profitability, however, one must look beyond their differences and view industries at a deeper level. In any industry, there are five basic competitive forces—diagrammed...
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...respond effectively. Develop customer loyalty. Harley-Davidson has been able to maintain a competitive lead in large motorcycles due to intense customer loyalty. Disadvantages of first movers High risk High development costs High demand uncertainty First mover market entry • Advantages Above-average returns until other competitors respond effectively Start down the learning curve earlier Opportunity to gain customer loyalty Opportunity to set standards Disadvantages • Uncertainty about demand • High development costs • Risk of adopting a losing standard (Beta/VHS) • • • Forces Shaping Industry Competition Threat of new Entrants Bargaining power of Suppliers Rivalry among Existing Competitors Bargaining power of buyers Threat of substitute products Forces Defining Competition In Mini Steels Rivalry • Diversification in product lines, ex pipes • Move towards high quality bars, structural shapes • Acquiring or adding new units Buyer’s Power • Boom in construction industry • Demand for high quality bars and large structural shapes • Reduction in scrap demand at ISP Supplier’s • Locating within 200-300 miles of markets Power New Entrants • Low entry barriers • Supply and demand side benefits of scale of incumbents Substiitut • Products from ISP es •...
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...THE MARKETING PROCESS Introduction This document presents a response to the questions regarding the three potential markets that an orthopedic group could enter with its service of pediatric sports medicine The three markets that the orthopedic group could ender that will allow it to earn large profits is the education market, children social networking market such as the YMCA (Young Men’s Christian Association), and minor sporting teams. This paper also describes the barriers to enter and exit the internal medicine market for a physician wanting to establish a solo practice, a company offering a health club facility in the same building where employees work, and hospital wanting to develop a coronary bypass program. Lastly this paper will answer the hypothetical question on three ways to make services unique to the population of baby boomers in San Antonio, Texas. Three Potential Markets for a Pediatric Sports Medicine Program to Enter Three markets that the orthopedic group could enter with their service of pediatric sports medicine would be the Education Market (Elementary, Middle, and High School), the Children Social Networking Market such as the YMCA, and Minor League Sport Teams. According to Katherine Lee from about.com “kids between 5 and 14 years of age account for as much as 40% of all sports-related injuries”(Lee, 2003). With that fact being known, the orthopedic group could hire physicians to work with local schools to teach kids how to prevent sport related...
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...QUIZ 2 tips ● General Environment Dimensions in the broader society that influence an industry and the firms within it ● Industry Environment-more direct effect on strategy Set of factors that directly influences a firm and its competitive actions and response ● Competitor Environment Focuses on each company against which a firm directly competes ●The General Environment is grouped into seven environmental segments: page 38 [1] Demographic – population, age, geographic distribution [2] Economic - Inflation and interest rates [3] Political/Legal – org & gov trying to influence each other AntiTrust & Tax laws, deregulation policies [4] Sociocultural – greatest impact, workforce diversity, quality of worklife [5] Technological-Product innovations [6] Global-trading between countries, critical global markets [7] Physical-energy consumption ●To successfully deal with uncertainty in the external environment and achieve strategic competitiveness, firms must be aware of and understand these segments. EXTERNAL ENVIRONMENTAL ANALYSIS-more important for technology based companies • Firms engage in external environmental analysis to better understand and cope with their environments. • This analysis has four parts: - • Scanning (cookies on websites) –studying all segments in the general enviroment • monitoring, -events and trends • forecasting-projections of future trends • assessing.-determine timing and significance of trends INDUSTRY ENVIRONMENT ANALYSIS ...
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...studied, and analyzed — * immediate / industry environment * national environment * broader socio-economic environment / macro-environment 2. According to Porter, what determines the level of competitive intensity in an industry? Michael Porter's analysis of industries captures the complexity of industry competition in five underlying forces. These are, Threat of Entry, Threat of Substitutes, Supplier Power, Buyer Power, and degree of Rivalry. 3. What should be scanned in the task environment? Task environment is actually another term for the industry environment. The four main components that exert influence in industry are: Suppliers, Competitors and potential substitutes, Potential entrants, and Buyers. These four are the most important component that should be scanned in the task environment. 4. Discuss how a development in a corporation’s societal environment can affect the corporation through its task environment. 5. How can managers identify external strategic factors? a. Environmental uncertainty b. Issues priority matrix c. New entrants d. Entry barriers e. Rivalry f. Substitute products g. Bargaining power of buyers and suppliers h. Bargaining power of other stakeholders a. Environmental Uncertainty- Situation...
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