Industry Segments (DL) As per the Gale Business Insights Global database, there is only 15 different companies operating within the Miscellaneous General Merchandise Industry. With so few companies, there is no proper way to segment this industry in order to analyze a specific segment. The Miscellaneous General Merchandise Industry is not a fragmented industry. A fragmented industry is one in which there are large amounts of small and medium sized companies. With this industry, the opposite is present. This industry is comprised of a small number of large retail chains that would make the barriers to entry very high due to startup costs and capital investments. Also, economies of scale would make it difficult to enter this industry because
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This is because there are no companies looking to enter the industry. The threat of new entrants has completely been absolved due to high market share percentages of existing companies along with very high capital investments. Also, the industry as a whole is growing, but not at exponential rates as it was in previous years. The industry is beginning to experience the decline of growth rates to a point in which new companies are deterred from entering the industry because of the lacking growth potential. Finally, the industry is reaching a point where it is becoming more and more saturated with the existing companies in the industry and because of this, there are price wars taking place in order for the existing companies to gain what market share they can from their competitors rather than trying to create demand. These are the characteristics of a mature industry.
Industry Analysis/Porter’s Five Forces (BN)
The Porter’s Five Forces were created to help individuals better understand the five key components that can affect an industry. The five components that make up Porter’s Five Forces are: threat of entry, bargaining power of buyers, threat of substitutes, bargaining power of suppliers, and industry rivalry. These five forces help determine the structure of the industry as well as the level of competition in the industry.
Risk of Entry by Potential Competitors …show more content…
Costs and advantages such as the “experience curve gained from trying different things in the marketplace, the sheer extent of how much knowledge is required to operate in the market, and the accessibility of this, proprietary technology that cannot be copied, preferential access to limited supplies of materials and parts, assets bought when they were much cheaper, advantageous locations, from shopping mall positions to being close to customers, and government subsidies and other national benefits” (“As well as…”) would have little to no effect on the larger companies in the retail
This is because there are no companies looking to enter the industry. The threat of new entrants has completely been absolved due to high market share percentages of existing companies along with very high capital investments. Also, the industry as a whole is growing, but not at exponential rates as it was in previous years. The industry is beginning to experience the decline of growth rates to a point in which new companies are deterred from entering the industry because of the lacking growth potential. Finally, the industry is reaching a point where it is becoming more and more saturated with the existing companies in the industry and because of this, there are price wars taking place in order for the existing companies to gain what market share they can from their competitors rather than trying to create demand. These are the characteristics of a mature industry.
Industry Analysis/Porter’s Five Forces (BN)
The Porter’s Five Forces were created to help individuals better understand the five key components that can affect an industry. The five components that make up Porter’s Five Forces are: threat of entry, bargaining power of buyers, threat of substitutes, bargaining power of suppliers, and industry rivalry. These five forces help determine the structure of the industry as well as the level of competition in the industry.
Risk of Entry by Potential Competitors …show more content…
Costs and advantages such as the “experience curve gained from trying different things in the marketplace, the sheer extent of how much knowledge is required to operate in the market, and the accessibility of this, proprietary technology that cannot be copied, preferential access to limited supplies of materials and parts, assets bought when they were much cheaper, advantageous locations, from shopping mall positions to being close to customers, and government subsidies and other national benefits” (“As well as…”) would have little to no effect on the larger companies in the retail