| I have included this from the original post I need the question at the end answered: Pressures on companies come from five sources; 1) competition from rival sellers 2) competition from potential new entrants to the industry 3) competition from producers of substitute products 4) supplier bargaining 5) customer bargaining power (Thompson et al, pp. 49, 2014). Thompson et al also highlights eight common “weapons” for competing with rivals; 1) price discounting 2) couponing 3) advertising characteristics 4) innovative product improvement 5) new/improved features 6) increased customization 7) bigger/better network 8) improved warranties (Thompson et al, pp. 49, 2014). Further, the text also highlights twelve of the most common drivers of change; 1) long-term industry growth rate 2) increased globalization 3) emerging new internet capabilities and applications 4) consumer populations 5) technological and manufacturing innovation 6) product and marketing innovation 7) entry/exit of major firms 8) diffusion of technical know-how across companies and countries 9) cost and efficiency 10) reductions in uncertainty and business risk 11) regulatory influences and government policy changes 12) societal concerns, attitudes, and lifestyles (Thomson et al, pp. 67, 2014). Lindsol assessed the textbook market to better understand his competitors. There were two large players in the market, with a better than average, cash flow that forced him to think deeper into his own business model to be able to be competitive in the market. He also assessed his customers to understand what they were looking for in a distributor of goods. The example referenced in the case is a solid example and can be applied to almost any good distributor industry; Amazon – the evolution from brick/mortar to web/application service. Specific to Lindsol’s industry in the textbook world, there were already changes actively occurring in the market. Traditional textbook purchasing was evolving to a trade market where students could sell books back for the seller to re-sell and/or rent the same copy. This model was hurting the publisher side of the industry and driving continuous sales down due to redistributed copies. To combat this, publishers created several editions of the same textbook to prevent redistribution. Lindsol recognized an opportunity in the industry well enough in advance of market saturation to be able to compete, and even be a leading force. He had a strong supplier bargaining power because the ebook product was in short supply at the time; this would have given him the ability to leverage the price setting arena within the new agency model that outpaced the retail model. I’ve personally experienced a similar supplier bargaining power example within the company I am a part of. We were ahead of our competitors in the digital space, and were one of the first healthcare systems to release a fully integrated patient application. This application provides consumers the opportunity to control their appointment scheduling, prescriptions, and insurance conveniently and efficiently. There are external factors that influence the consumer to lean towards our digital application model over the traditional phone contact model; convenience, time, and confidence. porter5.JPG Thompson, A. A., Gamble, J. E., Peteraf, M. A., & Strickland, A. J. (2014). Crafting and executing strategy: The quest for competitive advantage ; concepts and advantage. New York, NY: McGraw-Hill Irwin https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-five-forces.aspx (Links to an external site.) QUESTION I NEED ANSWERED: The text talks a little bit about how companies can lean into strengths in more than one of the 5 forces. Do you see an opportunity for this to happen with this company? Or do you think he should focus on strengths within supply bargaining? Why/why not? Reply |
