Characteristics Of Emerging Industries

industry covers services and platforms with a vast variety of focal markets. The portion of the

On a medium/long terms the company has the opportunity to be the pioneer in developing a innovative product with a positive impact among clients and

Primary assumptions to the theory include, high barriers to entry and exit, high sunk costs and imperfect knowledge of the market. In addition, this paper will analyze the company’s current standing in the market along with competitive strategies executed to grasp a greater portion of market share.

Industry Growth………………………………………….10 Concentration………………………………………….….10 Differentiation and Switching costs……………………13 Scale Economies and Fixed/Variable Costs…………..13 Excess Capacity and Exit Barriers………………………14

Threat to new entrants: There is no barrier to entry in this industry but it might be difficult for newcomers to compete against existing well establishing companies.

Opportunities: international market; co- operation with other bigger companies; launching of the new products; increasing tendency of the customer demand etc.

Opportunities include huge market, no competition for at least three years, potential huge margin, good marketing strategy.

Diversification: Developing new products in new markets can be a riskier strategy given the unproven market place. However, if innovation is a business value it may be worth the risk as long as you understand what’s at stake.

Entrants erode the market and rarely grow it enough to the incumbent’s advantage. New entrants have an impact on the industry business but at a moderate level. This is mainly because new firms will find it difficult to compete against the incumbents’ strong brand, like Starbucks and McDonalds, and because the market is saturated. However, the costs of entry are relatively low. Most of the raw materials are cheap and the distribution chain is not complicated. This makes it easy for new companies to enter the market. Also, established companies might leverage their brands as they enter the industry to compete against the incumbents.

The definition of an industry in general, it means that group of companies offering products or services that are close substitutes for each other, and satisfy the same basic customer needs. To narrow a definition of industry may cause firms to miss or reject attractive new opportunities. Starbucks is the largest coffee industry in the world. To analyze Starbucks’ coffee industry environment, The Five Forces Model will give a clear picture of the position that the industry is in and help develop an optimum strategy for success in the industry.

|the industry and its challenges it is important to understand its various phases of growth so far. |

Industry shakeout: A growing market and high profits induces new firms like Eagle Motors to enter market and increase production which again increases competition and rivalry.

The threat of new entrants refers to the threat posed by new competitors within an industry. If it is easy for new firms to enter the industry barriers to entry are low and the threat of new entrants is high. A profitable industry attracts more competitors. Economies of scale, learning curve effects and other macro factors impact the nature of an industry 's

There are also some risks for each strategy. Upholding cost leadership can be risky because of the requirement of frequent capital investment to sustain cost advantage, then cost surges narrow price differentials and diminish ability to compete with other’s brand royalty. Differentiation strategy has some threats, such as imitation decreases alleged differentiation, buyers need for differentiation falls. Meanwhile, the risks for focus or niche strategy are the differences in preferred products or services between the strategic market and target as a whole narrows, the cost discrepancy between wide ranged competitors and the focused firms broadens to eradicate the cost advantages of allocating a narrow target or to offset the

Investing in research and development to create new product line or enhance current products adds considerable expenses. Development costs will need to be re-cooped. This will keep competitors in check, but will be challenging to keep pricing competitive.