{"content":{"sharePage":{"page":0,"digests":[{"id":"47989392","dateCreated":"1323635374","smartDate":"Dec 11, 2011","userCreated":{"username":"AnqiFang","url":"https:\/\/www.wikispaces.com\/user\/view\/AnqiFang","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47989392"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Summary","description":"This paper is mainly talking about the five forces: intensity of competitive rivalry, threat from new entrants, bargaining power over buyers, threat from substitutes, and bargaining power over suppliers. He used a lot of examples in his paper which deepened our understanding of those concepts.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47788404","dateCreated":"1323303686","smartDate":"Dec 7, 2011","userCreated":{"username":"jcbarnett611","url":"https:\/\/www.wikispaces.com\/user\/view\/jcbarnett611","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47788404"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Five Forces multiple choice questions","description":"1) If you were assessing a market, and wanted to know how many rivals you would have if you decided to enter, which of the Five Forces would be most useful in your analysis?
\na. 1) Intensity of competitive rivalry
\nb. 2) Threat from new entrants
\nc. 3) Threat from substitutes
\nd. 4) Bargaining power of buyers
\ne. 5) Bargaining power of suppliers
\nf. A & B
\ng. A, B, C
\nh. All of the above
\n2) In which of the following markets would the bargaining power of buyers be strongest?
\na. Fast food industry
\nb. Ebay
\nc. Used car market
\nd. Single-payer health care country
\ne. B & C
\nf. All of the above
\n3) You are a prospective entrepreneur in an industry that has extremely high start-up costs. Which of the Five Forces best applies to your situation?
\na. 1) Intensity of competitive rivalry
\nb. 2) Threat from new entrants
\nc. 3) Threat from substitutes
\nd. 4) Bargaining power of buyers
\ne. 5) Bargaining power of suppliers
\n4) You are a nationwide company that owns and operates movie theaters. You are seeking to merge with one of your competitors. The resulting merged company will, in some markets, be the sole purveyor of first-run, commercial movies. The Department of Justice has decided to file suit seeking to block this merger. Which of the Five Forces best explains the DOJ\u2019s action?
\na. 1) Intensity of competitive rivalry
\nb. 2) Threat from new entrants
\nc. 3) Threat from substitutes
\nd. 4) Bargaining power of buyers
\ne. 5) Bargaining power of suppliers
\n5) You are the CFO of Meijer. You have just concluded contract negotiations which resulted in your company becoming the sole big-box retailer selling Masterlock combo locks, at a price that is lower than what your smaller competitors charge. The DOJ has just filed an injunction to block the implementation of this contract. Which of the Five Forces would best be used by you to describe the rationale behind the DOJ\u2019s action?
\na. 1) Intensity of competitive rivalry
\nb. 2) Threat from new entrants
\nc. 3) Threat from substitutes
\nd. 4) Bargaining power of buyers
\ne. 5) Bargaining power over suppliers","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47786928","dateCreated":"1323302571","smartDate":"Dec 7, 2011","userCreated":{"username":"jcbarnett611","url":"https:\/\/www.wikispaces.com\/user\/view\/jcbarnett611","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47786928"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Five Forces Final Summary","description":"Five Forces Final Summary
\nThe Five Forces model is a strategic management model conceived by Dr. Michael Porter of Harvard Business School. He developed it as a tool for analyzing competitive advantage within industries, which can be utilized in a number of different ways (Barney, Jay; Gaining and sustaining competitive advantage, New York: Addison-Wesley; 1996; p.6). Primarily, the Five Forces model is used to analyze an industry by a potential entrant into that industry. It can also be used in evaluating cases where competitive advantage is being manipulated, such as in antitrust cases. It has also been adapted for use in risk management by the Defense Department (Rice, John; Adaptation of Porter\u2019s Five Forces Model to Risk Management; 2010, p.378). For this wiki, I have used it to analyze different antitrust cases, which has been very intriguing.
\n
\nThe first of the Five Forces is intensity of competitive rivalry. We have covered this topic fairly extensively in class. Intensity of competitive rivalry simply refers to how many firms compete in an industry, and how strongly they compete. In a market that exhibits near-perfect competition, a firm has absolutely no market power- their individual demand curve is horizontal, emanating from the prevailing market price. They are price takers, and in the long run earn zero economic profit (Behe, p266). In a couple of the antitrust cases I analyzed, the defendant firm was trying to move the market as far away from the direction of perfect competition as possible. Specifically, Bayer Corp and several coconspirators colluded in the late 90\u2019s to keep the price of certain chemicals artificially high, and to keep any possible entrants from deciding to enter (DOJ, http:\/\/www.justice.gov\/atr\/cases\/bayer3.htm<\/a>). Another interesting case is US V. Andrew Bodnar. Bodnar was a senior VP at Bristol-Myers-Squibb, one of the major pharmaceutical firms in the US. When one of his company\u2019s products, Plavix, was losing its patent exclusivity and entering generic production, Bodnar intentionally deceived the FTC into believing that BMS was planning on launching its own generic. This would have prevented another company, Apotex, from producing the generic form of Plavix for an additional 180 days. Bodnar\u2019s action was solely to prevent another company from competing with BMS (DOJ, http:\/\/www.justice.gov\/atr\/cases\/f244500\/244551.htm<\/a>). In sum, intensity of competitive rivalry is a very important factor to consider when entering a market, or analyzing competition within a market.
\n
\nThe second of the five forces is threat from new entrants. This can be affected by a number of factors, including necessary economies of scale, start-up requirements, and other barriers to entry. To use an example that has been cited in class, Budweiser, Miller, and Coors face little threat from new entrants in their domination of the domestic, generic beer market. An entrant wanting to chip into their market share would have to create a manufacturing process that mimics their economies of scale, would have to set up a nationwide distribution network, and would in general have phenomenally high start-up costs. On the opposite end of the spectrum, I posted a link to a Five Forces analysis of the smartphone gaming industry (http:\/\/sgentrepreneurs.com\/commentary\/2011\/11\/24\/starting-a-new-company-do-industry-analysis-part-one\/<\/a>). The threat from new entrants in that industry is incredibly high, because there are few barriers to entry, and the costs to start up are miniscule (they can really only be measured in the value of the programmer\u2019s labor).
\n
\nThe third of the Five Forces is the threat from substitutes. From a new entrant\u2019s perspective, this force applies to them insofar as how is their product differentiated within the industry? Are they creating a novel and innovative product within their industry that will have no immediate substitutes? Or are there already firms out there that produce your product or something close to it? From a big, established firm\u2019s perspective, the fear of the threat from substitutes is the reason behind a majority of antitrust filings by the DOJ. In these situations, a large firm is afraid that a new entrant will be able to provide the same good or service they do, either more quickly, more effectively, or more cheaply than they can. Thus, they act in a sometimes-unlawful manner to try and prevent substitutes from entering their market. This was the case in US v. GE, where GE attempted to block substitutes for its high-cost maintenance labor on some of its advanced medical machines. Hospitals who buy and use these machines were attempting to train their staff on their maintenance, and then market these services to other hospitals who couldn\u2019t afford to maintain a full-time staff. GE saw that this would be a perfect substitute for its own maintenance services, and they attempted to block it (http:\/\/www.justice.gov\/atr\/cases\/f1000\/1047.htm<\/a>).
\n
\nThe fourth Force is the bargaining power over buyers. In many cases, the bargaining power of buyers over a firm\u2019s product will be limited to their choice whether or not to buy your product. In a limited number of cases, however, buyers can act in collusion to drive down retail prices. For example, Groupon.com utilizes the bargaining power of buyers in negotiating reduced prices for goods and services for its members. One notable case where the bargaining power of buyers is extremely high would be in the health care products market in countries with single-payer health care. In the UK, for example, the NHS (National Health Service) administrates all hospitals and doctors offices in the country. There are a few private, for-profit hospitals, but for the most part there, the NHS has control over all of them. In such a situation, the makers of health care products such as prescription drugs, prosthetics, MRI machines, etc., have only one buyer- the NHS. As such, they must tailor their products and prices to meet that one buyer\u2019s needs.
\n
\nThe fifth Force is the bargaining power over suppliers. This refers to the strength of the firms that provide the goods a firm uses to produce its products. For example, a possible entrant into the gas station market would have to take into account that their power over the price of the main product they sell, gasoline, is dictated by their suppliers. They cannot demand a lower price or even attempt to negotiate a lower price for their supplies with the oil companies because those companies own the means of production for gasoline. Thus, it has essentially no bargaining power over its suppliers. Conversely, the suppliers of gasoline can dictate at will the price of the good that gas stations charge, and there is nothing that the gas station can do about it, unless it decides that it wants to sell below market cost and lose money. An inverse of this situation would be where a firm has tremendous power over its suppliers. A case in point would be Walmart. Because of the sheer size of Walmart, it can dictate to its suppliers how much and what they should be supplying, and what price they need to sell at. Thus, large, dominant firms in some industries have tremendous bargaining power over their suppliers.","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47777560","dateCreated":"1323294903","smartDate":"Dec 7, 2011","userCreated":{"username":"amdevoss","url":"https:\/\/www.wikispaces.com\/user\/view\/amdevoss","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47777560"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Example of game theory","description":"http:\/\/faculty.lebow.drexel.edu\/McCainR\/top\/eco\/game\/game.html<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47513634","dateCreated":"1322966344","smartDate":"Dec 3, 2011","userCreated":{"username":"jcbarnett611","url":"https:\/\/www.wikispaces.com\/user\/view\/jcbarnett611","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47513634"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Five forces in online gaming","description":"The following is an article that seeks to be a guide for aspiring entrepreneurs in analyzing the industry they seek to enter. It analyzes the online gaming industry using the Five Forces perspective, value chain analysis, and penetration pricing strategies.
\n
\nhttp:\/\/sgentrepreneurs.com\/commentary\/2011\/11\/24\/starting-a-new-company-do-industry-analysis-part-one\/<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47385900","dateCreated":"1322785718","smartDate":"Dec 1, 2011","userCreated":{"username":"cartersprunger","url":"https:\/\/www.wikispaces.com\/user\/view\/cartersprunger","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47385900"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"An application of Porter's Five Forces in India","description":"http:\/\/www.openpr.com\/news\/202498\/Growth-in-the-textile-industry-to-boost-Dyestuff-Market-in-India-finds-Netscribes.html<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47105668","dateCreated":"1322516803","smartDate":"Nov 28, 2011","userCreated":{"username":"rmgauger","url":"https:\/\/www.wikispaces.com\/user\/view\/rmgauger","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47105668"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Five Forces","description":"http:\/\/www.quickmba.com\/strategy\/porter.shtml<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47076278","dateCreated":"1322496105","smartDate":"Nov 28, 2011","userCreated":{"username":"kmwesterfiel","url":"https:\/\/www.wikispaces.com\/user\/view\/kmwesterfiel","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47076278"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Forbes article about comparative advantage","description":"Interesting article about AstraZeneca attempting to prove comparative advantage and being unable to substantiate the claim. Also interesting perspective on why it might not be in business' best interest to fund such initiatives, but that it would be in the public's best interest to gain this information.
\n
\nhttp:\/\/www.forbes.com\/sites\/harlankrumholz\/2011\/11\/15\/astrazeneca-study-is-good-news-for-the-public-bad-news-for-astrazeneca\/<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47052958","dateCreated":"1322453812","smartDate":"Nov 27, 2011","userCreated":{"username":"jcbarnett611","url":"https:\/\/www.wikispaces.com\/user\/view\/jcbarnett611","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47052958"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Antitrust resources","description":"The source material for all these cases can be quickly found using the DOJ's website, here:
\nhttp:\/\/www.justice.gov\/atr\/cases\/index.html<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]},{"id":"47052944","dateCreated":"1322453775","smartDate":"Nov 27, 2011","userCreated":{"username":"jcbarnett611","url":"https:\/\/www.wikispaces.com\/user\/view\/jcbarnett611","imageUrl":"https:\/\/ssl.wikicdn.com\/i\/user_none_lg.jpg"},"monitored":false,"locked":false,"links":{"self":"https:\/\/mbaeconfall2011.wikispaces.com\/share\/view\/47052944"},"dateDigested":1532762679,"startDate":null,"sharedType":"discussion","title":"Antitrust resources","description":"The source material for all these cases can be quickly found using the DOJ's website, here:
\nhttp:\/\/www.justice.gov\/atr\/cases\/index.html<\/a>","replyPages":[{"page":0,"digests":[],"more":0}]}],"more":true},"comments":[]},"http":{"code":200,"status":"OK"},"redirectUrl":null,"javascript":null,"notices":{"warning":[],"error":[],"info":[],"success":[]}}