The five forces that shape competition:
1. Threat of entry
2. The power of suppliers
3. The power of buyers
4. The threat of substitutes
5. Rivalry among existing competitors
I wasn't sure why threat of entry shaped competition until i read more into in to it and found out that basically the idea behind it is the more companies enter the market the greater the competition will be which is a totally normal thing I just didn't think of it in this way.
I agreed with everything the author said in this chapter but I did have questions. Could a market expand if there was no competition? We would not have as many technological improvements for sure and maybe suppliers could set prices as high as they wanted to.
Eliminating rivals is a risky strategy. A profit windfall from removing today’s competitors often attracts new competitors and backlash from customers and suppliers.
No comments:
Post a Comment