Using a leisure market of your choice, discuss the extent to which it may be considered to be an oligopoly. An oligopoly is a market that is dominated by a few firms who have a high concentration ratio. Oligopolies frequently maintain their positon of dominance in a market because it is too costly for potential firms to enter the market. This is called barrier to entry, and due to this they can earn supernormal profits (see figure) as they can protect themselves from competition in the long run. For the cinema market building something which can seat enough people with the right equipment (e.g.
As is stated in the article, the company used to have a major competitive advantage in terms of movie selection, where, “…customers could browse through thousands of titles…” (Hitt 106). Now, the entire scope of the market has changed and Blockbuster was much too slow to respond. The recent moves that it has made will surely generate profits, but not enough to sustain the company in the long run, seeing as there is nothing that differentiates Blockbuster’s services from that of its competitors. In order to fully gain lost market share back, the company would have to create some sort of highly innovative way of viewing or renting movies that none of its competitors has already thought of; It would have to be something that is rare, difficult to imitate, not easily substituted, and able to generate above-average returns. Unfortunately, at this point it looks as if none of this will come into fruition because Blockbuster has essentially decided to latch on to other companies, creating a sort of symbiotic relationship where the company feeds off of the success of its competitors.
Question 1: Despite its growth and size, why is Inventec not very profitable? Inventec is not very profitable due to: 1. Extensive industry competition: a. ODMs are fragmented. There are many existing large ODM competitors such as Asustek, Compal and Quanta who all have larger economy scales than Inventec in terms of their sales revenue. Meanwhile, as OEMs tend to primarily outsource ‘commodity technology’, EMSs and ODMs are increasingly competing for the same client base.
They help major banks, retail companies and telecommunication companies. There is no doubt that Symcor is the best company for outsourcing services based on their work, reputation and commitment to deliver success. Weaknesses Even though Symcor is a very strong company it has some weaknesses. One weakness is that Symcor is increasing the unemployment rate. Due to giving companies outsourcing opportunities, these companies will fire their staff because staff overseas will work for cheaper and sometimes even better.
The sole proprietor has the advantage of maintaining complete control over his or her business. Disadvantages: One of the greatest disadvantages to a sole proprietorship is the lack of cash flow or access to capital like loans or investors. They do not have the advantage of getting access to capital through bonds or shares and credit is based on their personal credit history. The lack of capital keeps purchase power restricted in comparison to corporations. Liabilities can be very heavy for sole proprietors depending on the nature of the business.
The veterans were taking the better clients giving themselves a better commission. This also left the territories under worked and not producing as many sales as possible. The final problem that Dave Thomas encountered was enforcing the strategy and policy with the older sales people. While the younger sales people are driven and respectful to new changes, the veteran sales reps are used to the old way and the enforcement of new changes is difficult. As far as strategy, there is consistently a discrepancy between selling high volume or selling only high margin items.
Koss Corporation Case Q1. From the Koss Corporation case, we can see that there are many aspects are not functioned properly in the accounting and internal control systems of Koss Corporation. First, the CEO’s supervision and regulation is weak, which means Michael has not fulfilled his responsibility of internal control. Sue initiate and authorize wire transfers of Koss Corp. funds to Sue’s personal creditors for over $16.3 million without requiring or obtaining Michael’s approval. And because Michael trusted Sue, Michael did not fully review the financials before approving them.
Threat of Substitutes: Management consulting firms are one of the threats for substitution. (“Management Consultants doubled as potential clients as well as direct competitors in terms of offering digital strategy”, p.9, para 2). Another outside industry threat is the IT firms. (“Huge found itself pitching against an IT company who were offering many of the services as Huge” p.9, para 3). 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.
Prior to polices established by Law of Commerce Henkel Iberica participated in aggressive pricing to increase market share. The consequences of this were a negative effect on margins, contribution margins, and profits on sales. To contend with its competitors, Henkel invested in promotions and additional product mix to increase sales, but due to lack of accuracy in long range forecast it was often left with either over stock that is difficult to reallocate or loss of sales due to out of stock products which eventually led to a decrease of net earnings in sales year before. Accurately forecasting demand is the key to every strategic, tactical, and operational decision designed to keep our business competitive. Obviously it is evident that Henkel Iberica current process isn’t working due to challenges of forecast exactness and demand variability for all the products it offers.
Threat of substitutes from such services as internet providers is high and increasing as modern technology becomes more prominent, it is a driving force resulting in the disintermediation of traditional travel agency businesses. This consequently means that threat of new entrants is high, as anyone can now set up their own travel agency business online. Thereby the possibility of new entrants is greater now as opposed to in the 1990’s when the internet was not as prominent in the travel agency sector. Finally, rivalry amongst competition is high. This all concludes to the disintermediation of travel agencies.