Question 1: Industry Definition
An industry is a group of firms producing services or goods that meet the same needs. For example, Samsung and Apple Inc. compete to produce smartphones.
Question 2: Other participants in an industry
In an industry environment, there exist other players who could be offering complementary or supplementary products. The participants are customers and suppliers.
Question 2a: Other stakeholders included
Question 3: What industry analysis tool is used to assess
Industry analysis is a tool used to understand the distribution of profits among the market participants. A firm’s profitability varies depending on the competition intensity rivals within the industry and on the influence of players within the environment. Therefore the tool can help assess a major change’s effect. It helps in changes such as deregulation, where the government withdraws to create competition, new technology entrance, productivity, complements, and demographic shifts.
Question 4: Industry analysis be applied to humanitarian industry
Yes, industry analysis tool can be applied to humanitarian aid because it applies to any situation where there is competition among organizations. Benefits from donations become the profits in the case of such organizations. The structure of the company determines the distribution of the profits and is affected by the aid agencies, suppliers’ bargaining power, and customers.
Question 5: Concentration ratio
The concentration ratio is the extent to which a small group of firms dominates their industry. The study of industries economics found a relationship between industry structures and performance measures such as profits.
Question 6: Return on capital
Return of capital is used to understand a company’s profitability by understanding its investments if they are effective in maintaining or protect market shares and profits.
Question 7: Average Return on invested capital
The average return on invested capital is 14.9%.
Question 8: Industries with the highest return on capital
Question 9: Barriers of entry
Evaluating barriers to entry involves some factors such as:
Question 10: Difference between the endogenous and exogenous barrier of entry
Endogenous are barriers created by firms in the industries, while exogenous are barriers created by the industry’s economic characteristics.
Question 11: Competitors and suppliers in the airline industry
The airline industry is an oligopoly in nature, forming an imperfect competition where its rivals are the competitors. Suppliers in this industry are vendors, operators, and authorities, among many.
Question 12: Bargaining power of suppliers
The high bargaining power of a firm depends on a number of factors. The firm can supply concentration, industry switching costs, and differentiated products to maintain a bargaining power. On the other hand, maintaining a low bargaining power involves where the customer is allowed to dictate, and it involves undifferentiated products and high switching costs.
Question 13: Bargaining power of buyer power
|A customer has high bargaining power if they are concentrated and sellers are few, low customer switching cost, undifferentiated products, and credible threat of backward integration.
Question 14: Substitute
A product is a substitute for another if they serve the same purpose. Still, from outside the industry, therefore, it must satisfy the same need to a customer to check qualification. Analyzing a product’s substitutes involves considering the customer’s perspective, such as vesting a customer instead of waiting for them to come.
Question 5: Complements
Complements are products that are consumed together. Complements are analyzed as the sixth force since they can impact all other
Question 16: Rivalry among competitors
Harvard Business Publishing. (2021). Industry Analysis.
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