Matthew W Ford
Session 3 Study Notes (Updated 06/02/2011 04:43 PM)
Define an industry. Name two industry classification systems.
True or false: All industry classification systems are basically the same. Explain...
Porter's Five Forces Model
What is the Five Forces Model supposed to represent? Draw a diagram showing how the five forces link together.
True or false: As a general rule, choice of industry explains more of the variance in profits between companies than any other variable.
Force 1: Intensity of Rivalry
Rivalry can be price-based or non price-based. Explain.
List and briefly explain two factors that can lead to increased industry rivalry and provide an example of each.
What is a CR4? A Herfindahl Index? Be able to calculate either given some data. What do higher CR4 and HI values imply?
What is meant by switching cost? Give an example.
Force 2: Availability of Substitutes
What is meant by a substitute product? Give an example.
List and briefly explain two factors that can lead to increased threat from substitution and provide an example of each.
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