Differentiating Between Market Structures Differentiating Between Market Structures As a business owner it is very important to be able to differentiate between market structures and be able to compete in the marketplace making sure to implement competitive strategies that are effective in the market structure to maximize long term profitability. If one does not know these differences and how to implement competitive strategies they will most definitely suffer from the possible consequences that may come from this such as a decrease in profits, the closing of a business, foreclosure, and terminations. The following paper will include a market analysis on Kudler Fine Foods and recommendations on how to maximize profits. Kudler Fine Foods
Another threat of substitute could be companies hiring in house people to save costs, in which case they will have to compete with them in terms of attracting talent as well. Freelancers seem to be another plausible substitute outside the industry. This shows that there’s a high threat for substitutes. Bargaining Power of Buyers: In this industry, some buyers are buying in volumes that are large compared to the vendor. (“Huge tended to
Each firm has some market power, supplies branded products and entry barriers exist. Contestable markets are markets where the entry and exit costs are low. Competition is always likely in a contestable market. Taking this into consideration it would be a very hard market to enter and compete it due to the big names already dominating the market. When a new mobile phone enters the market it would be difficult for them to match up to the big names like o2.
If he relocates one of the stores he could also lose customers as well. The internal weakness include not wanting to hire outside of his family and the timing if he relocated one of his stores which he could lose current and potential customers due to the opening of West 9. He is not sure of his ability of running two stores either . External perspectives The characteristics of this industry are that with similar companies that are larger it greatly affects smaller companies with the cheaper prices that these companies can offer to customers. The firm’s strategy for differentiation is to be able to provide exceptional customer service by react quickly to competition
The bargaining power of suppliers is weak because good substitutes for supplier products/services exist and the number of suppliers is large relative to the number of industry members and there are no suppliers with large market share. The bargaining power of buyers is strong because buyer costs of switching to competing products are low and the industry’s products are standardized or undifferentiated. This analysis reveals that the strength of competition in the industry is strong especially since the recession that began in 2008 caused buyer demand to decrease. This decrease in buyer demand strengthened the intensity of competition. What factors are critical to success in the U.S. family clothing stores industry?
This forced the corporation to decide whether to locate production close to their target markets, where significant labor costs are necessary during production; or in a region where production and labor costs are significantly cheaper due to unregulated labor pools in many overseas countries. Choosing to place production where there is low cost labor provides an opportunity for increased revenue, as well as profit maximization, but raises ethical concerns for the company. Despite the great financial success of Nike’s international expansionary process there were also many failures. These failures stemmed from the use of low-cost labor, a lack of competition by rival corporations, and several unsuccessful advertising techniques. Consequently, the
They have to compete with there competitors for business in this type of organization. Suppliers can’t get the resources to make there products on time and affects every division in a production state of mind and trying to meet there customers supply and demand. 6) Discuss how current macroeconomic conditions are impacting your organization. With the way the economy has been it affects every division because of gas prices, people don’t fly as much, they don’t buy cars and they have to make sure there prices are competitive. Chapter 4 – Choosing a Form of Business Ownership 1) Identify the form of business ownership of your organization GKN is a corporation 2) Discuss the advantages and disadvantages, with regards to your chosen organization, of this form of business
Since the snack foods industry was very competitive, one of the main business risks derives from the competition in the markets. New players of the market would have a big influence on the Hill’s operations on lower price offering and lower production cost. Firstly, the company couldn’t rely on price increases in a high rivalry industry. Secondly, with the increase of competitor, Hill would face the decrease in its potential profit margin, hence, extremely high efficiency would be required and tight cost controls were necessary conditions for success. Another business risk should depend on the position of economic and the lack of productions’ diversification.
There are reasons for firms to outsource their productions. Large retailers such as Walmart had tremendous negotiating power over its contract manufactures, firms had to continually reduce prices in order to compete in the market. As a result, they have to looking for oversea vendors where the labor cost is very low, in order to cut costs and make profits. In addition, contract vendors helped Mattel address the highly seasonal nature of its business. There were three problems in the Mattel’s toys which were lead excess paint, defective design and misuse by customers.
Gap Analysis: Kuiper Leda Regardless of how successful a business is, if supplies do not keep up with demands that business will have a difficult time to make profits without the needed sales. The reverse is also true when the supplies grossly exceed demands as the excess inventory would result in tied up money that could be used for other projects or business plans. Therefore, the art of making the most of the inventory is to have the products available when and where they are needed. Situation Analysis Kuiper Leda (KL), operated out of the Republic of Novamia, is a manufacturer of electronic components, especially in the production of the Electronic Control Units (ECUs) and the sensors for the automotive industry (University of Phoenix, 2009). For the past six months, KL has introduced the new product line of producing the Radio Frequency Identification Devices (RFIDs) (University of Phoenix, 2009).