Industry Analysis Book Publishing in United States

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  • Topic: Publishing, Publication, Mass media
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INDUSTRY ANALYSIS: BOOK PUBLISHING IN UNITED STATES| Individual assignment 2|
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Monika Sajdyk|
2013-11-02|

Introduction - theoretical basis
Do you want to better understand an industry? Are you considering to start a new business or take over the company? Do you want to diversify your activities and enter new markets? But you do not know how difficult it will be to keep them? Porter's 5 forces analysis will help to understand the market where you are targeting or going to work. Not all markets, industries and sectors are the same. In some access to the materials is simple and they are cheap, easy to enter the market, and customers are pushing the doors and windows. In such markets, companies are relatively easy to get a high margin on sales, and thus maintain high profitability. In other markets, the competition is fierce - access to raw materials can be difficult, it may be difficult to get a reasonable share of the market, customers can be very demanding. In such markets, companies are often faced with high costs and low prices, and it is difficult to obtain satisfactory margins. In such markets, companies must constantly fight to stay afloat. If you are considering to start a new business, diversification of activities, buy or invest in an existing business, Porter's 5 forces analysis is a great tool by which you judge the difficulty of the market in which you compete. On the other hand, if you act on the market, the same analysis will show you the competitive context in which it is located. If you understand the forces which influence the market situation in your industry, you can develop strategies which will help you gain a competitive advantage and increase profits. Porter 5 forces analysis is to examine the competitive market in five dimensions:

1. Competitive force in the market competition
The intensity of competitive rivalry is the first force in Porter's 5 forces analysis which analyze “market difficulties”. In a highly competitive, market where companies compete with each other about the customer, margins are usually quite low. It should be noted that competition can take place not only on the price level. Companies can also try to gain advantage by: mention your product from others, creating a relationship with customers, creation or use of new, non-standard distribution channels, price competition. The intensity of competitive rivalry is varying in different markets. The market competitiveness is more and more intensive if we can find on the market some of the following elements: * a large number of competitors

* low market growth
* high exit barriers
* low switching costs for the customer
* the strategic nature of the market
* the low level of product differentiation
* high fixed costs

2. Bargaining power of suppliers
We take into account the bargaining power of suppliers in Porter 5 forces analysis. Every company which operate in the market, must acquire materials and services, which create its production. If the bargaining power of suppliers is strong, they can impose high prices and take same part of the margin which is achieved in the market. The bargaining power of suppliers is high when:

* number of suppliers in the market is limited
* suppliers can threaten the omission customers (contractors) and sell goods directly to end-customers * switch costs are high
The bargaining power of suppliers is low when:
* suppliers are fragmented and there are many of them
* the products offered by suppliers are uniform
* companies can become a suppliers by starting their own production and channel to find and distribution resources 3. Bargaining power of buyers
The next strength of the market in Porter's five forces analysis is the bargaining power of customers. When it is high, buyers can have an influence on the price level. The bargaining power of buyers is high when:

* the number of buyers is low...
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