Chapter 5

Question 1

Which model assesses the state of competition in an industry

What are the categories and explain

Answer 1

Porters 5 forces

1. Threat of new entrants - barriers to entry? And barriers to exit?
2. Bargaining power of customers - who is paying - lower price wanted
3. Bargaining power of suppliers - who is supplier - higher price wanted
4. Threat of substitutes - alternative products and how good are they
5. Competitive rivalry - previous 4 feed in to this

Question 2

What are the criticisms of P5F model (3)

Answer 2

Not helpful for NFP organizations

Less useful in dynamic industries

Ignores the potential for collaboration eg forming long term relationships with suppliers

Question 3

What are the 5 stages to the life cycle of an industry

What could be a potential 6th

Answer 3

Introduction

Growth

Shakeout

Maturity

Decline

Research and development

Question 4

How can an organization extend its lifecycle

Answer 4

By exporting to other economies that are at an earlier stage in the life cycle

Question 5

What are 4 examples of barriers to entry

Answer 5

Economies of scale
High investment
Regulation
Reputation/ strong branding