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Industry-Competitive Factors Existing Competitors

CHAPTER3

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ASSESSING OPPORTUNITIES AND THREATS:DOING AN EXTERNALANALYSIS

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TABLE 3.2 Evaluating the Five Competitive Factors Threat

Opportunity

Numerous competitors Few competitors Equally balanced competitors One or a few strong competitors Industry sales growth slowing Industry sales growth strong High fixed or inventory storage costs Low fixed or inventory storage costs No differentiation or no switching costs Significant differentiation or significant switching costs Large capacity increments required Minimal capacity increments required Diverse competitors Similar competitors High strategic stakes Low strategic stakes High exit barriers Minimal exit barriers

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Possible Competitors Significant economies of scale No or low economies of scale Cost disadvantages from other aspects No other potential cost disadvantages Strong product differentiation Weak product differentiation Huge capital requirements Minimal capital requirements Significant switching costs Minimal switching costs Controlled access to distribution channels Open access to distribution channels Government policy protection No government policy protection Consumers Consumer purchases large volumes Consumer purchases small volumes Products purchased are significant part of consumer's costs Products purchased aren't significant part of consumer's costs Products purchased are standard or undifferentiated Products purchased are highly differentiated and unique Consumer faces few switching costs Consumer faces significant switching costs Consumer's profits are low Consumer's profits are strong Consumer has ability to manufacture products being purchased Consumer doesn't have ability to manufacture products Industry's products aren't important to quality of consumer's products Industry's products are important to quality of consumer's...
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