Chain Saw Case

Topics: Marketing, Barriers to entry, Saws Pages: 3 (559 words) Published: September 11, 2010
1) Rivalry is a key force in the chain saw industry. There are a large number of firms already in the industry like Stihl, Huquvana, etc and this coupled with low industry growth, every company is vying for a larger share of the pie. High fixed costs also contribute to companies operating at near capacity and with high production, improving market share becomes critical. Also high exit barriers in this industry negate the ease of abandoning the product, thereby increasing rivalry. Buyer power is another major force to reckon with. In the chain saw industry, the biggest buyers are concentrated, with the likes of Sears, Home Depot, Lowes etc with significant market share. These buyers purchase a significant portion of the output, distribution of purchases. Supplier power force can also assume importance in this industry. Since there are many players and the product is fairly standardized, there is not much room for negotiation. Last but not the least, barriers to entry/threat of entry as a force plays a major role as well. In terms of entry barriers, factors like Patents and proprietary knowledge, Organizational economies of scale come in to play and from exit barriers standpoint, highly specialized assets and high exit costs deter any plans to abandon the industry. Professional Group

2) Strategic Groups
High There are three strategic groups in chain saw industry...
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