Econ 5315 Hw 10
Submitted By farteritano
Adapted Homework, Ch. 11
(11 points possible)
1. “An Analysis of sustainability is similar to a five forces analysis.” Comment on this, focusing on the firm you’ve been studying for your term project. (1 point)
A sustainability analysis is similar to a five forces analysis because they are focus on creating competitive advantage. The sustainability analysis is to analyze and find a way to compete with competitors and deal with potential entrants, in order to maintain profits in the long run. The analysis includes the company’s resources and isolating mechanism that help the company to sustain its advantages. The five forces analysis also analyze 5 factors, like supplier power, buyer power, competitors, new entrants, and substitutes and complements, which affect to the company profits. The company can use both analysis to build competitive advantage and maintain its position, market share, and profit margin in the industry.
2. (a) How do economies of scale affect sustainability? (b) Economies of scope? (2 points: 1 point each) When economic of scales happens it definitely affects sustainability because the resources and isolating mechanism changes. For some companies might be easier to scale to large quantities of production and the competitive advantage could change for the one able to do it. Economies of scope will also change the sustainability because producing two products because it is the same cost to produce one of them can change how companies limit competitors and one of those two products could become an advantage for some or the other way around 3. Kellogg’s and General Mills have their market dominance for over a century. Sprint and T-Mobile have both been hard hit by competition. What is different about the product/market situations in these two cases that affects sustainability? (1 point) In terms of sustainability the...