according to Porter‚ new entry into the industry reduces the existing firm’s profitability. The threat of new entrants will depend on the extent to which there are barriers to entry. These can be: economies of scale for the advantage of incumbents‚ high initial investment and fixed costs‚ controlled access to suppliers and distributors‚ high switching costs for consumers‚ legal requirements and restrictions‚ price retaliation‚ product differentiation and customer loyalty to established brands. The airline
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entrants. Barriers to Entry 1. Supply-side economies of scale: Occurs when firms that produce larger volumes enjoy lower cost per unit‚ because they can spread high fixed costs over a large number of units‚ or have more efficient technology‚ or can command better terms from suppliers. 2. Demand – side economies of Scale: Network effects. The desire of a consumer to buy a product increases with the number of other buyers that buy the product. 3. Customer Switching Costs: There may
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There are six major sources of barriers to entry: 1. Economies of scale —These economies deter entry by forcing the aspirant either to come in on a large scale or to accept a cost disadvantage. 2. Product differentiation Brand identification creates a barrier by forcing entrants to spend heavily to overcome customer loyalty. —> e.g. Softdrink Company 3. Capital requirements The need to invest large financial resources in order to compete creates a barrier to entry 4. Cost disadvantages
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Compare and contrast packet and circuit switching in 250 to 300 words. Which is more commonly used? What are the advantages and disadvantages of each? Packet-switched networks move data in separate‚ small data blocks‚ or packets as they are more commonly known‚ based on the destination address in each packet. When received‚ the packets are reassembled in the proper sequence to make up the message. The packets are not dependent on any one path or connection‚ and can take as many paths as necessary
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entrants to an industry can raise the level of competition‚ thereby reducing itsattractiveness. The threat of new entrants largely depends on the barriers to entry. High entry barriers exist in some industries . whereas other industries are very easy to enter .Key barriersto entry include- Economies of scale- Capital / investment requirements- Customer switching costs- Access to industry distribution channels- The likelihood of retaliation from existing industry players. Threat of Substitutes The presence
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14‚ 1936‚ the National Language Institute selected Tagalog as the basis of National Language. As time went by‚ Filipinos started to use both languages at the same time and thus‚ code switching emerged. According to YourDictionary.com (n.d.)‚ “Code switching” is a linguistics term that basically means switching back and forth between two or more languages in the course of a conversation. It can also refer to the ability to switch languages or dialects quickly from one conversation to the next
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Tariff Barriers to Trade Tariffs are taxes that government imposes on commodities‚ one of the methods that governments used to control economic activity. There are two identified reasons why would government impose tariffs to imported goods. Firstly‚ they are an important source of income for the government. Secondly‚ tariffs can protect the local industries that face competition from imported goods by imposing tariffs on imported goods. Tariffs are effective and widely used to protect the
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: Threat from New Entrants Supply Side Economies Of Scale • declining ARPU • Infrastructure tenancy costs • Other FC like BPO Demand Side Benefits • Brand pull exists to some extent for brands like airtel /idea/ Vodafone Customer Switching Costs • Cost of new connection low • Proposed number portability Capital Requirement • Extremely high infrastructure setup costs • Spectrum License cost Incumbent Advantages • Established brand image • Reliability of network
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matter to the customer. There are two main ways to strengthen customer retention. One is to erect high switching barriers or cost. Customers are less inclined to switch to another supplier when this would involve high capital costs‚ high search costs‚ or the loss of loyal – customer discounts. The better approach is to deliver high customer satisfaction. The definition of switching costs is quite
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Ques 1:- “Strategy” and “Strategic Planning” is something that is done once a year which results in a report. Others think it is market position‚ operational effectiveness or an idea or business model. Strategy is choosing to perform different activities that can be preserved and that will provide a sustainable competitive advantage. It is a mental exercise. It is a way of thinking about the world and approaching business. Strategic planning is a process to produce innovative and creative ideas
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