Concept check

Date: 2015-10-07; view: 602.

Industries and their players

In some industries there are few companies: these industries are concentrated. Other industries are fragmented: for example, there are millions of restaurants worldwide, and even the largest chain, McDonalds, only has a market share of less than one percent in terms of all restaurant meals served worldwide. Some industries have low entry barries, for example, – anyone with a small amount of capital can open a restaurant. If an industry has low entry barries and is attractive because of its high potential profitability, there will be new entrants. This was the case for Internet service providers with a lot of companies offering this service. Other industries, like steel, require massive investments in equipment, know-how, etc. – these are high entry barriers and new entrants to the industry are rare.

1.Define key and minor players in an industry, and competitive forces.

2.What is the central idea of Michal Porter's theory?

3.What competitive forces does M. Porter outline? In what way do they influence a company's long-term success in the market?

4.What strategies does M. Porter consider to be important to retain a competitive advantage and to achieve success?

5.In what way do low and high entry barriers influence the market structure?

6.Read the statements anddecide if they are true or false. Comment on your viewpoint. Use I'm absolutely convinced that, as I see it, as far as I'm concerned, I completely agree with the statement, I totally disagree with it.