3-1. mcgraw-hill/irwin copyright © 2008 by the mcgraw-hill companies, inc. all rights reserved....
TRANSCRIPT
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Industry Analysis
Chapter 03
3-4
Aggregate Category Factors
Category size Category growth Stage in product life cycle Sales cyclicity Seasonality Profits
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Category Factors
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressure from substitutes Category capacity
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Factors in Assessing the Structure of Industries
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Amount of intracategory rivalry Threat of substitute products or
services
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Threat of new entrants
Economies of Scale Product Differentiation Capital Requirements Switching Costs Distribution
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Buyer Bargaining Power is High When:
Product bought is a large percentage of the buyer’s cost.
Product bought is undifferentiated. Buyers earn low profits. Buyer threatens to backward
integrate. Buyer has full information. Substitutes exist for the seller’s
product or service.
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Supplier Bargaining Power is High When:
Suppliers are highly concentrated, that is, dominated by a few firms.
There is no substitute for the product supplied.
Supplier has differentiated its product or built in switching costs.
Supply is limited.
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Major Characteristics of Categories Exhibiting Intensive Rivalries
Many or balanced competitors Slow growth High fixed costs Lack of product differentiation Personal rivalries