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Competing in the Global Market

Competing in the Global Market. Global competition impacts: industry structure degree of competition firm’s national origin and the competitive advantage of nations Competitive position costs, market share, price quality, accumulated experience Competitive forces - Five Forces Analysis.

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Competing in the Global Market

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  1. Competing in the Global Market • Global competition impacts: • industry structure • degree of competition • firm’s national origin and the competitive advantage of nations • Competitive position • costs, market share, price quality, accumulated experience • Competitive forces - Five Forces Analysis

  2. Fragmented Industries • ‘Populated by a large number of Small Medium Enterprises’ Porter • ‘Absence of market leaders with the power to influence events.’ • Where: • low barriers to entry • transport costs are high • local image important etc.

  3. A fragmented industry may become consolidated with: • technological change • standard product preferred over customised one • large publishing companies with small ‘imprints’ • Consolidate naturally with age • Without consolidation a firm can specialise and grow by: • offering a standard product or service • dealing with particular customers • Concentrating on a particular area

  4. Concentrated Industries • Dominated by a small number of large firms, exercising significant influence over the market • How does this happen? • Cheap to produce in bulk • Significant resources to stay in business • High barriers to entry etc.

  5. Always a main market leader • influences the way business is done • strong relationship with sources of supply • control over distribution networks

  6. Emerging Industries • New or reformed industry • e.g electronic publishing and interactive TV - FT, New York times, Digital TV. • e.g Waste recycling - BMW, Winchester City Council • e.g Internet browsers - Netscape Navigator • e.g Road pricing systems - Toll systems for bridges and motorway

  7. Problems with emerging industries: • lack of faith in technology • innovative product where customer needs are as yet unknown • high initial start up costs • potential customers need to be kept informed of developments • early barriers to entry e.g raw materials • competition for components • customer confusion • Obsolescence • Erratic quality • Scepticism from bankers and investors

  8. Which UK digital is best?

  9. Waste Recycling?

  10. Link in with . . . • Kenichi Ohmae - Globalisation means businesses do not have a nationality, but shared values • Levitt ‘Globalisation of Markets’ • Competitive Advantage of Nations (last week) • Kotler - Where do we go from here?

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