Switching barriers

marketing strategies to gain more market share. In the LCV market there is a high degree of competition between a small number of large companies. The companies are usually not diversified beyond automotive manufacture. The sector could raise exit barriers if it is in a downturn. Hence the overall rivalry is strong in this market. • The firm must produce capacity to attain the lowest unit costs when the total costs are mostly fixed costs. Large quantity is sold by a firm and high levels of production

1. Bargaining Power of Supplier: According to Akbar and Inggriantara, 2012, p. 392, Supplier’s power is about how the supplier increases the prices of their products. Normally, the suppliers will have the power to increase the price when the switching costs of the products were high, the distinctiveness and inimitability of the products as well as the importance of the customer to the company and so on. When the power of suppliers high, the snacks industries will be less attractive. For example

Economies of Scale As a company grows, not all costs increase with it, and some may even go down. Incumbent companies who have economies of scale can hence have a significant cost advantage over new entrants and smaller competitors. Economies of scale can be demand-side or supply-side and may be found in the cost of: • Original research • Raw materials • Manufacturing and production • Marketing to larger audiences • Shipments and logistics • Service and support • Attracting talented personnel Overcoming

capacity and wants to capture the market share. New entrants bring price competition in the industry and affect the profitability of existing players. The threat of entry depends on the entry to barriers and expected retaliation of incumbent to previous entrant. Author has discussed different entry barriers that are advantageous to incumbent and restrict the new players in market. These include suppliers economies of scale,

Buyers have more power when they are large-volume buyers, the product is a significant aspect of the buyer's costs or purchases, the products are standard within an industry, there are few switching costs, the buyers earn low profits, potential for backward integration of the buyer group exists, the product is not essential to the buyer's product, and the buyer has full disclosure about supply, demand, prices, and

through bargaining and negotiating. According to Porter (2008) negotiating leverage will increase if there are relatively few buyers or purchases have a large volume compared to single-supplier output, if suppliers have undifferentiated products, the switching costs are low and if backwards integration is feasible. The agribusiness chain has unique features such as perishability, seasonality, rapidly changing supply and demand, use of contracts and sometimes limited price information, which will shape

profitability is drawn down. Across different industries the levels of profitability differ. Graph 3 1: Porter’s 5 Forces Threat of New Entrants and Entry Barriers: The 7 major sources of barriers to entry that incumbents have relative to new entrants are supply side economies of scale, demand side benefits of scale, customer switching costs, capital requirements, incumbency advantages independent of size, unequal access to distribution channels, restrictive

2.Demand conditions If the local market for a product is larger and more demanding at home than in foreign markets, local firms potentially put more emphasis on improvements than foreign companies. This will potentially increase the global competitiveness of local exporting companies. A more demanding home market can thus be seen as a driver of growth, innovation and quality improvements. 3.Related and Supporting Industries When local supporting industries and suppliers are competitive, home

Toll Brothers, Inc. MEMORANDUM A request has been made in regards to the strategic management effort of Toll Brothers, Inc. current and future financial position by senior management. The report has several components starting with a Memorandum Introduction followed by an EFE Matrix, IFE Matrix, SWOT Matrix, Porter’s Five Competitive Forces, and the conclusion. Toll Brothers is a construction company that was founded in 1967 originally designed and built luxury homes in the suburbs of Philadelphia

1:0 Introductions There are many approaches in business today that managers can use to analyze the business environment such as SWOT analysis, PEST analysis, PORTER’S five forces analysis, four corner’s analysis, Value chain analysis, Early Warming Scans and War Gaming. However, many organizations use Michael Porter’s frame work to analyze business micro environment where the organization/company belongs. Business development managers/ Market Survey managers are mainly critical on analysis of