Social Choices As A Social Concept Of Business And Exchange

As we see in the articles the most common external being competitive situation, this has a huge impact on businesses if the competiors has a better product this could make the consumer choose that product, resulting in decline in sales. This being in

Threat of new entry. Competitor barriers to entry into the industry ranged from low to medium; however, with such fierce competition among the top three, entrants were surely challenged.

Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents’ position (Porter, 1980b; Sanderson, 1998) The most common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows:

Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

The expected retaliation from well-established companies for brand equity, resources, prime real estate locations and price competition are moderately high, which creates a moderate barrier to entry.

Threat from Suppliers: Suppliers are at a disadvantage in the current market. There are more suppliers than businesses to purchase them which weights the power to Company G. Company G has numerous options in suppliers who compete for our business. Company G will need to secure two new suppliers for parts components before it can begin production.

Industry

availability of substitutes 1, and the threat of retaliation from incumbents (by lowering price, for

The more prospective the competitive advantage the more it becomes hard for it's advantage to be neutralized .

Industry definition: "Companies in this industry manufacture cars and automobile chassis. These operations, which are referred to as automakers, typically produce cars, including electric cars, in assembly plants. The manufacture of light trucks (e.g. vans, pickups and SUVs), heavy trucks and motorcycles is excluded from this industry." [2]

Another quality of perfect competition that may be overlooked, but is vital to this industry is the ease of entry into the market. Start-up franchises within this market structure can begin operating with relatively low initial investments (compared to other industries). This is not the case where monopolies are concerned. There are numerous barriers to entry into monopolistic market structures, capital being one of the most prominent barriers.

The threat of substitutes is low. Buyers are unlikely to substitute Corning’s product because few substitutes exist. Additionally, switching costs would also be high for business buyers to substitute Corning’s with another manufacturer’s

The Sector pertains to the economy, industry describes the company itself and Business is a company that operates within an industry.

Barriers to entry- there can either be high barriers to entry which makes the market unattractive and hard for new entrants or there can be low barriers to enter which make it easy for new entrants in the market.

The threat of substitutes: where it refers to substitute product as those that are available in other industry which can also fulfil the need and want of the consumers. It can affect competition in an industry by placing an invisible ceiling on prices which companies within the industry can charge, due to the fact that if the cost of substitute is low then the consumers will tend to purchase substitutes, therefore limiting the prices that a company can place on certain items to gain maximum profit. For example, lemonade can be substituted for a soft drink. Generally, competitive pressures arising from substitute products increase as the relative price of substitute products declines and as consumer 's switching costs decrease.