Threat Of New Entrants Research Articles

Mapping supply chain strategy: an industry analysis

Purpose – In manufacturing industries, the levels of inventories at all stages (i.e. raw material, work-in-process and finished goods inventories) indicate the firm's competitive positioning, strategies, internal processes and relationships with suppliers and downstream customers. The authors identify patterns of manufacturing industries based on levels of raw material and finished goods inventories to classify inbound and outbound supply chain strategies. Design/methodology/approach – The authors review literature on supply chain inventory strategy and perform cluster analysis to analyze patterns of manufacturing industries based on manufacturing industry data collected from US Census of Bureau. Following Porter's Five Forces Model, the authors perform in-depth case studies of four representative industries to analyze factors driving supply chain strategies, including industry intensity of rivalry, threat of new entrants, threat of substitutes, bargaining power of suppliers, and bargaining power of buyers. Findings – This study identifies three streams of research on supply chain strategy: Fisher's model and its variations, lean and agile paradigms, and push/pull systems. It finds that whether an industry shows low or high raw materials or finished goods inventories depending on its products, processes, and the dynamics of all forces described in the Five Forces Model. Research limitations/implications – This study is not able to include supplier selection, production strategies, warehousing and distribution, and even product design into the analysis of supply chain strategy due to data limitation. This study classifies industries based on average inventory levels of raw materials and finished goods, while inventory levels and supply chain strategies for specific firms may vary significantly within each industry. Originality/value – This study contributes to the supply chain management literature by providing a parsimonious framework of mapping inbound and outbound supply chain inventory strategies, and the results based on the analyses of all US manufacturing industries provide a baseline picture for supply chain management professionals with manufacturing firms.

Product market competition and conditional conservatism

Based on pooled cross-sectional analysis, we find a robust positive relation between product market competition and conditional accounting conservatism. We also find evidence of an inter-temporal increase in conditional conservatism following industry deregulation and increased antitrust case filings. Distinguishing further between two dimensions of competition, we find conditional conservatism is greater when there is a higher threat of new entrants as well as stiff existing competition. Moreover, we find these results largely hold for industry followers as opposed to industry leaders, suggesting that strategic considerations shape the extent to which product market competition affects conditional conservatism.

Competitive Strategies in the Computer Industry

A firm's competitive behavior is very important for its survival. Relevant stakeholders in an industry are interested in a firm's operational as well as financial performance. In order to gain competitive advantage, a firm must remain steadfast during changes it goes through over time. This is true for the computer industry as well. The computer industry has been advancing very fast and firms in the industry are experiencing fierce competition for many reasons. This study examines the computer industry in terms of Michael Porter's framework for analyzing the profitability. The authors conduct a critical analysis of the threat of new entrants into the computer industry segment, the bargaining power of suppliers in the industry, the bargaining power of buyers in the industry, the threat of substitute products or services, and rivalry among competitors in the industry. This study has implications for incumbent firms and new entrants into the computer manufacturing industry that evaluate competitive strategies in the industry.

Challenges Facing the Horticultural Sector in Nairobi County, Kenya

The horticultural sector contributes significantly to the economic development of many countries including Kenya. However, the sector faces numerous challenges that hinder its full contribution to most economies especially in the developing countries. This study was carried out to determine the key challenges facing the horticultural sector in Nairobi County, Kenya. The study made use of primary data, collected from the management and staff of thirty six horticultural fims in the County.The data was analysed using frequencies and measures of central tendcency such as mean, mode and standard deviation. The study established that horticultural export firms faced several challenges in their operations which hinder their effective performance in the sector. The key challenges include rivalry within the industry, competition for source of suppliers, competition for warehousing facilities, competition for channels of distribution, lack of departments for strategy implementation, threat of new entrants to the market, market dominance by strong competitors, unique products by the competitors, price wars within the industry, competitors’ wider branch network and lack of distribution networks. It is recommended that the management should device appropriate response strategies to address these challenges to ensure sustainable development of the horticultural sector in the County.

The Impact and Implications of On-Demand Services on Market Structure

This paper considers on-demand services and its impact on market structure, firm profitability, and consumer welfare. The unique properties of on-demand services are the conversion of fixed costs to variable costs, removal of capacity constraint, and fast setup time (which enables quick entry by any firm at any time when there is opportunity), whereas privacy and security concerns and switching costs have been noted as the biggest barriers from adopting on-demand services. With a stylized model capturing these benefits and barriers to using on-demand services, we establish several results. First, we show that conversion of fixed cost to variable cost enables new and small firms to enter existing markets and leads to the creation of new markets. Second, we show that competition and the threat of new entrants can be an important driver of a firm's decision to switch to on-demand services. In addition, a firm's barriers to using on-demand services can influence another firm's entry decision. Third, we show that two identical firms may employ different technologies in equilibrium. Fourth, we show that fast setup time and removal of capacity constraint associated with on-demand services make it impossible for firms to make supranormal return and would lead to a perfect competitive market, even when there is only one firm, under very general conditions. Such a result still holds even when there exists an economy of scale (e.g., quantity discount) from using on-demand services. On the other hand, when there are barriers preventing firms from offering similar products and products are substantially differentiated, on-demand services can amplify this advantage of entry barriers by enabling firms to further increase prices and enhance their profitability. Therefore, contrary to the common belief that offering on-demand services is best for firms offering commodity products, we show on-demand services to be more profitable for firms with differentiated products.

Drivers of environmental performance of cement plants

PurposeThis paper aims to reveal the impact of five industry forces (IFs) on implementing input‐based competitive strategies (CSs) and to determine relationship of these CSs on cement plants' environmental performances (EPs).Design/methodology/approachData were collected from cement manufacturers in Turkey. This study employed structural equation methodology to examine relationships between IFs, CSs, and EP.FindingsCement plants with the advantage of low buyer bargaining power, low threat of new entrants, and few rivalries exhibit strong energy and raw material strategies. Also, an advantage of low supplier bargaining power and low threat of substitutes causes competitive raw material strategy. Finally, competitive energy and raw material strategies enhance EP, while competitive human resource strategy has no influence on it.Research limitations/implicationsThe model should be tested on other organizations in supply chain. Future researches can also investigate the difference of findings to other industries and in other countries and examine reasons behind hypothesized relationships. Moreover, additional factors may be incorporated into the model. However, a larger participation could provide a different perspective of issues in consideration.Practical implicationsThis paper can serve as a valuable framework for top managers to draw the direction of their companies in terms of IFs, CSs, and EP. In this context, practitioners should focus on production inputs to withstand external environment and to experience better EP practices.Social implicationsA better EP can both enhance sustainability of the overall environment and affect society positively. For such benefits, sustainability of EP should be a subsequent step to be taken to possess long‐lasting societal advantages.Originality/valueThis study is first to propose a model that integrates competitive IFs and input‐based approaches to measure cement plants' EPs. These are relevant issues for competitiveness of cement manufacturers willing to increase their EPs.

A Case Study on Customer Acquisiton and Retention on the Airline Service Industry

This report provides an analysis on customer acquisition and retention on the airline industry. This research has been done because of the rapid increasing of airline service usage. In today's time where the competition is strict, knowing how to acquire and retained customers is very important. Hence, these project objectives are to find out what are the factors that affect customer's satisfaction and provide recommendations for better customers' acquisition, repetition and recommendation for airline service. First of all, the airline industry background has been analyzed by Porter's five forces model. Based on the analysis, it shows that the power of suppliers and competition between existing firms in airline service industry is high. While, the threats of substitutes, power of buyer and threats of new entrants are relatively low. Moreover, in order to help airline companies to survive this strict competition, several important attributes have been provided to achieve the objectives. This includes Customer acquisition, Customer retention, Customer Satisfaction and loyalty, Service Recovery and Management and Training. Next, this project use primary quantitative research method which is distributing survey and use several journal and books as a secondary research method to support the thesis. The sample size of the survey is 80 respondents. The data will be analyzed using XLD Data analyst. Based on the result, it shows several factors that affect customer's satisfaction which lead to acquisition, repetition and recommendations in purchasing airline service

Product Market Competition and Conditional Conservatism

Based on pooled cross-sectional analysis, we find a robust positive relation between product market competition and conditional accounting conservatism. We also find evidence of an inter-temporal increase in conditional conservatism following industry deregulation and increased antitrust case filings. Distinguishing further between two dimensions of competition, we find conditional conservatism is greater when there is a higher threat of new entrants as well as stiff existing competition. Moreover, we find these results largely hold for industry followers as opposed to industry leaders, suggesting that strategic considerations shape the extent to which product market competition affects conditional conservatism.

A resource-based approach to the study of export marketing from Australia

This study examines the empirical links between industry structure, strategy, marketing capabilities and performance in Australian export ventures. Data were gathered via a self-administered mail survey directed to the Chief Executive Officer of 1853 export market ventures. The sample came from a wide cross-section of industries and was provided by a government department. The findings indicate that as far as industry structure was concerned, the power of buyers and the threat of new entrants as well as marketing capabilities and whether or not the firm pursued a product innovation, premium quality, corporate image or niche strategy all had a significant impact on export marketing performance.

Game Theory Analysis of the Impact of Single-Aisle Aircraft Competition on Emissions

To meet aviation’s CO 2 emission reduction targets while maintaining mobility in the face of increasing effective fuel costs, technology innovation will be required. The single aisle commercial aircraft market segment is the largest by quantity and value, but has the longest running product lines. New aircraft programs offer the largest potential gains in fuel efficiency, but are risky and require large capital investments. Re-engining existing airframes reduces risk and capital requirements, but offers lower potential fuel burn improvements. Incremental improvements to existing aircraft lines may entail the lowest risk. It is hypothesized that competition has important effects on manufacturers’ decisions to innovate and that these effects must be considered when designing policies to reduce CO 2 emissions from aviation. An aircraft program valuation model is developed to estimate expected payoffs to manufacturers under different competitive scenarios. A game theory analysis demonstrates how the incentives for manufacturers to innovate may be altered by subsidies, technology forcing regulations, increased effective fuel costs, the threat of new entrants, and long-term competitive strategies. It is shown that increased competition may result in incumbent manufacturers producing re-engined aircraft while increased effective fuel costs may result in new aircraft programs. Incumbents’ optimal strategies may be to delay the entry into service of new single aisle aircraft until 2020-24, unless technology forcing regulations are implemented.

Turnaround Management through Internal Corporate Venturing: A Case Study of a Seafood Company

New business creation is influenced by the five industry and competitive forces proposed by Michael Porter i.e. bargaining power of customers, bargaining power of suppliers, threat of new entrants, threat of substitutes and intensity of competitive rivalry. There is a need for fostering innovation in the light of current competitive realities. Hence the key to success for any organization in the present competitive and dynamic environment is the need to adopt an entrepreneurial strategy by inducing intrapreneurial culture through internal corporate venturing and innovation . Growth of any organization is possible by effectively identifying and exploring opportunities that are market driven. This paper attempts to highlight as to how any innovation- be it product, process, material or any other type- can be converted into a sustainable competitive advantage to build a firm standing in the arena of business. In order to conduct the research the researchers have adopted a Case Study approach. In this particular study it was observed that the turnaround of the company was based on the innovative mindset of the intrapreneurs. This is done by studying and analyzing the innovation and success of Gadre Marine Export, Mirkarwada, Ratnagiri - Maharashtra.

Understanding Universities in Ontario, Canada: An Industry Analysis Using Porter’s Five Forces Framework

In analyses of higher education systems, many models and frameworks are based on governance, steering, or coordination models. Although much can be gained by such analyses, we argue that the language used in the present-day policy documents (knowledge economy, competitive position, etc.) calls for an analysis of higher education as an industry. In this paper, the university sector in Ontario’s higher education industry is analyzed by applying Michael Porter’s five forces framework defined by the following forces: the threat of new entrants, supplier power, buyer power, the threat of substitutes, and industry rivalry. Our assessment revealed that competition in Ontario’s higher education industry (university sector) is currently mixed. The findings suggest that policy-makers, the sector, and individual institutions will need to consider more seriously the impact of technology and globalization when seeking a competitive position for the Ontarian higher education system.

Dynamics of trade between the formal sector and informal traders

The informal sector in South Africa is a significant, but not well understood phenomenon. One important question relates to the nature of the relationship between the formal and informal sector. This article uses Porter’s five forces model to interrogate the linkages between informal fruit and vegetable traders in the Natalspruit Market (Ekurhuleni) and their formal suppliers, primarily the Johannesburg Fresh Produce Market. While the threat of new products is low, the street traders’ position is weakened by the threat of new entrants, consumer bargaining power and lack of cooperation among street traders. In relation to supplier power, we conclude that while this varies according to a number of factors, the formal sector is dominant over informal fruit and vegetable sellers in this market. This finding rests primarily on the observation that, because of their fragmentation, the informal traders’ collective buying power is not being used in the same way as large formal retailers of fruit and vegetables to obtain better terms of trade with the formal economy supplier.

Needs Assessment for Business Strategies of Anesthesiology Groups' Practices

Progress has been made in understanding strategic decision making influencing anesthesia groups' operating room business practices. However, there has been little analysis of the remaining gaps in our knowledge. We performed a needs assessment to identify unsolved problems in anesthesia business strategy based on Porter's Five Forces Analysis. The methodology was a narrative literature review. We found little previous investigation for 2 of the 5 forces (threat of new entrants and bargaining power of suppliers), modest understanding for 1 force (threat of substitute products or services), and substantial understanding for 2 forces (bargaining power of customers and jockeying for position among current competitors). Additional research in strategic decisions influencing anesthesia groups should focus on the threat of new entrants, bargaining power of suppliers, and the threat of substitute products or services.

Free WiFi as Strategic Competitive Advantage for Fast-Food Outlet in the Knowledge Era

Problem statement: The growth of food outlets in Malaysia brings about the stiff competition among the players in food industry. To remain competitive, each outlet needs to adopt its own strategy in order to secure their return on investment and profitability. In knowledge era, technology has become an added value in achieving competitive advantage. The aim of this research is to assess whether providing free WiFi can be a strategy to remain competitive. Porter’s 5forces competitive model is adopted as the basis for the assessment. Approach: Two phases of data collection using qualitative methodology were planned and rolled out. The first phase involved surveying and observing three regions within a selected state, while the second phase involved interviewing the identified food outlet’s manager. A set of interview questions was formulated based on the 5 areas of porter’s model which includes bargaining power of suppliers, bargaining power of customers, threat of substitutions, threat of new entrants and existing rivalries. In addition to the existing five forces, information regarding government policy and initiatives was also collected. Results: Result has shown that by that offering free WiFi to meet the customers’ needs, it can help to generate revenue increase of as high as 50% thus ensuring the food outlet to stay competitive. Conclusion: This is more visible when dealing with case of food outlets at same area are targeting the same group of customers as what had been observed in this research. This research provides a good reference to other food outlets that yet to adopt any strategy in order to stay competitive.

The Firms’ Survival and Competition through Global Expansion: A Case Study from Food Industry in FMCG Sector

This study analyzes the ABC the food industry in Fast-Moving Consumer Goods (FMCG) sector in Turkey by the Michael Porter's Five Forces Analysis. In this study Michael Porter's Five Forces Model adapted for the food industry. The analysis can provide insight into both enterprise online and offline competitive environments. As a result of this paper, the threat of new entrants into the FMCG is low because it requires huge capital investments in order to be competitive and to establish a brand name. In developing international strategy, the business marketer must first assess the globalization potential of the industry. It is driven by market economics, environmental and competitive conditions.

Strategic Innovation Decisions: What You Foresee Is Not What You Get*

This research attempts to (1) identify the factors that influence strategic decision making (i.e., a choice made among various strategic options), and (2) establish their relative importance in the context of new product development. Hence, this study's research question is formulated as follows: from a descriptive perspective what factors prevail in managers' strategic decision making on new product development, and from a normative perspective is this behavior optimal? An exploratory case research study generated a four‐dimensional framework of strategic decision making. In 17 companies, the decision‐making processes and subsequent implementation of 22 business innovation projects were studied. Managers' choices are determined by the assessment of (1) the business opportunity, (2) the feasibility, (3) the competitiveness, and (4) the leverage opportunities provided by the strategic option. The research question was then further addressed in a field site survey of 144 managers of ChemCorp, a global, multidivisional chemicals company. The ex ante conjoint study shows that feasibility and business opportunity prevail over competitiveness and leverage at the decision‐making moment. Using PLS‐Graph revealed that a manager's idiosyncrasies and the current and the future context of the division to which they belonged barely affected the relative weight of the decision‐making criteria: only the division's customer power and the threat of new entrants significantly influence positively the support for business opportunity assessments. This raised an important question: if feasibility and business opportunity appear as being, overall, the two most important strategic decision‐making criteria ex ante, are they key differentiators between success and failure ex post? An ex post critical incident study was conducted on 75 successful innovations and 69 failed innovations reported by the ChemCorp respondents. Using PLS‐Graph, this study shows that the competitiveness of a strategic option is a very important predictor of new project success. While the findings await replication in other industries (e.g., industries of a less capital‐intensive nature), they are intriguing: strategic innovation decision making may be off track when reality is accounted for.

Progress in airline distribution systems: The threat of new entrants to incumbent players

For decades, distribution has been a key ICT (Information and Communication Technology) area for airlines and this sector has been dominated by four (now three) Global Distribution Systems (GDSs) whose primacy has been threatened over the last four years by a set of new players, the so called GDS New Entrants (GNEs). GNEs emerged with the advent of the Internet and open source technology as ‘disintermediation’ facilitators and generated vast interest from airlines because they promised to reduce the cost of distribution. This paper explores the impact of ICTs on airlines with a focus on GDSs. It provides an overview of the changing market dynamics, analyses the environment that led to the appearance of GNEs and pinpoints the issues behind their until now failure to provide a true alternative to the GDSs. This analysis complements existing academic research in that it clarifies critical issues in the air travel distribution field and provides an overview of current industry developments.

Powdered Metals in North Central Pennsylvania

Powdered metallurgy manufacturing processes form green metal parts from particulate powders which, then, are sintered to produce complex, near-shape parts with high dimensional controls, low scrap, and desirable metallurgical properties. Pennsylvania, especially the North Central WIA, has captured the dominant share of the U.S powdered metallurgy manufacturing. Threats to the powdered metallurgy manufacturing industry in the North Central WIA include global competition and the possibility that the industry might begin reaching a growth ceiling associated with maturing industries.Opportunities exist for the powdered metallurgy manufacturing industry in the North Central WIA to yield cost and flexibility advantage relative to more traditional metal forming industries. Additional opportunities are available for improving the impact of the powdered metallurgy manufacturing industry on employment and earnings in the North Central WIA through substitution of local supply for imports and through increasing the competitiveness of manufacturing industry is subject to global competitive pressures. Porter's Five Forces Analysis provides a framework for benchmarking the global competitive position of the powdered metallurgy manufacturing industry. The five forces underlying Porter's model include: threat of new entrants; threat of substitute products; bargaining power of customers; bargaining power of suppliers, and competitive rivalry within an industry. The Penn State WED Initiative is designing a study of the global competitive position of the powdered metal part manufacturing industry around Porter's framework as an aid to strategic planning for the stability and growth of the industry.

Progress in airline distribution systems: The threat of new entrants to incumbent players

For decades, distribution has been a key ICT (Information and Communication Technology) area for airlines and this sector has been dominated by four (now three) Global Distribution Systems (GDSs) whose primacy has been threatened over the last four years by a set of new players, the so called GDS New Entrants (GNEs). GNEs emerged with the advent of the Internet and open source technology as ‘disintermediation’ facilitators and generated vast interest from airlines because they promised to reduce the cost of distribution. This paper explores the impact of ICTs on airlines with a focus on GDSs. It provides an overview of the changing market dynamics, analyses the environment that led to the appearance of GNEs and pinpoints the issues behind their until now failure to provide a true alternative to the GDSs. This analysis complements existing academic research in that it clarifies critical issues in the air travel distribution field and provides an overview of current industry developments.