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Business Fundamentals was developed by the Global Text Project,
which is working to create open-content electronictextbooks that are freely available on the website
http://globaltext.terry.uga.edu. Distribution is also possible viapaper, CD, DVD, and via this collaboration, through Connexions.
The goal is to make textbooks available to the manywho cannot afford them. For more information on getting
involved with the Global Text Project or Connexions email us atdrexel@uga.edu and dcwill@cnx.org.
Editors: Salvador Treviño and Carlos Ruy Martinez (ITESM, Monterrey Campus, Mexico)
Contributors: Carlos Alberto Alanis, Gaspar Rivera, Jorge Echeagaray, Jose de Jesus Montes, Juana Monica
Garcia, Ramiro Robles, and Roberto Sanchez
Models of industry attractiveness; the strategic perspective
In order to be successful in business, we must understand what our customer’s needs and wants are and deliver them in an efficient and profitable manner. In order to do so, we must also understand the industries in which the companies are immersed and what makes them attractive from the general point of view.
Industry attractiveness was initially described by Michael Porter in his book,
Competitive Strategy (Porter 1980). Porter’s well-known
Five Forces Model is often used as an analytical tool by companies when they are deciding whether or not to enter a particular industry. According to Porter, what makes an industry attractive or unattractive is determined by 5 forces:
- Rivalry: This force is measured by how intense the rivalry/competition relationship in an industry is. The factors affecting rivalry are: number of competitors, slow market growth, low levels of product differentiation, how aggressive competing companies are, etc. For example, retailing has always had the reputation of being a highly competitive industry, while the rail road industry is thought to be less competitive.
- Threat of substitutes: In Porter's model, substitute products refer to products that can be substituted for your own. Substitute products can be found within own or other industries. For example, if you decide to start an inter-city bus company, you have to consider all the other options your customers have to get from one city to another, for instance, city trains, small shuttle service, shared private cars, among others.
- Buyer power: The power of buyers is the impact that customers have on a producing industry. In general, when buyer power is strong, the buyer has the ability to set the price because usually there are very few buyers and many suppliers. Grain farmers are often used as an example. In most countries, there are many small farmers who grow grain, but few large buyers who have the power to set the price a farmer receives.
- Barriers to entry: Barriers to entry are unique offerings of companies in an industry that any company wishing to enter that industry must be prepared to overcome. Examples from developed economies are online banking and ATM services for banks and frequent flyer programs for airlines. In many cases, development of these expected products or services is quite expensive for a new entrant, and, thus, it s a barrier to entry.
- Supplier power: Suppliers are powerful when there are few suppliers for a company to purchase necessary items from. In a situation where there are few suppliers, it is typically difficult for a buyer to get a lower price from another supplier. An example is the oil industry, where they are many buyers, but relatively few suppliers, and most of the suppliers are members of the OPEC cartel which sets common production quotas, thereby controlling the market price for oil.
Questions & Answers
how does the planets on our solar system orbit
how many Messier objects are there in space
Astronomy (from Ancient Greek ἀστρονομία (astronomía) 'science that studies the laws of the stars') is a natural science that studies celestial objects and phenomena. It uses mathematics, physics, and chemistry in order to explain their origin and evolution.
Rafael
what is big bang theory?
Rosemary
what type of activity astronomer do?
Rosemary
the big bang theory is a theory which states that all matter was compressed together in one place the matter got so unstable it exploded releasing All its contents in the form of hydrogen
Roaul
I want to be an astronomer. That's my dream
Astrit
Who named the the whole galaxy?
what is the dark matter
Richard
what are the factors upon which the atmosphere is stratified
bigbang is the beginning of the universe
Sokak
but thats just a theory
Sokak
nothing will happen, don't worry brother.
Vansh
these are Rocky substances between mars and jupiter
GANGAIN
Comets are cosmic snowballs of frozen gases , rock and dust that orbit the sun. They are mostly found between the orbits of Venus and Mercury.
Aarya
hey can anyone guide me abt international astronomy olympiad
sahil
how can we learn right and true ?
why the moon is always appear in an elliptical shape
Because when astroid hit the Earth then a piece of elliptical shape of the earth was separated which is now called moon.
Hemen
Did you mean eye sight or sea level
Minal
oh sorry it's sea level
lidiya
according to the theory of astronomers why the moon is always appear in an elliptical orbit?
Gatjuol
hi !!! I am new in astronomy....
I have so many questions in mind ....
all of scientists of the word they just give opinion only.
but they never think true or false ...
i respect all of them...
I believes whole universe depending
on true ...থিউরি
Govinda
we're all stars and galaxies a part of sun. how can science prove thx with respect old ancient times picture or books..or anything with respect to present time .but we r a part of that universe
w astronomy and cosmology!
Michele
another theory of universe except big ban
there many theory to born universe but what is the reality of big bang theory to born universe
Asmit
what is the exact value of π?
Nagalakshmi
there are many theories regarding this it's on you believe any theory that you think is true ex. eternal inflation theory, oscillation model theory, multiple universe theory the big bang theory etc.
Aarya
I think after Big Bang!
Michele
from where on earth could u observe all the stars during the during the course of an year
I think it couldn't possible on earth
Nagalakshmi
in this time i don't Know
Michele
is that so. the question was in the end of this chapter
Karuna
in theory, you could see them all from the equator (though over the course of a year, not at pne time). stars are measured in "declination", which is how far N or S of the equator (90* to -90*). Polaris is the North star, and is ALMOST 90* (+89*).
So it would just barely creep over the horizon.
Christopher
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Source:
OpenStax, Business fundamentals. OpenStax CNX. Oct 08, 2010 Download for free at http://cnx.org/content/col11227/1.4
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