Please enable JavaScript.
Coggle requires JavaScript to display documents.
WEEK 7 - EXTERNAL - COMPETITION, Market structures - Coggle Diagram
WEEK 7 - EXTERNAL - COMPETITION
Dynamic of competition
Stage of industry life-cycle
Industry life-cycle model
Decline
Maturity
Growth
Introduction
Type of industry
Oligopoly
Duopoly
Perfect competition
Monopoly
#
Mergers & acquisition control
Cartel
Patents
Hill et al. (2017)
Characteristics of industry have a direct effect on firm's performance
Porter (2008)
An industry structure affects its average profitability
Positioning appoach
Structure - Conduct - Performance paridigm
Bain (1956)
Structure = Value Creation (AUR); Conduct = Value Capture (ROS); Performance = ROCE
Companies in different industries demonstrate different performances
Consider tax, debt & equity
Porter (2008)
Use ROCE ratio
Avoids influence of different taxation systems & equity/debt structures
Look at ROCE, ROE, ROS & AUR for industry comparison
What is an industry?
Hill et al (2014)
Group of companies - substitute products - same basis customer needs
Analysis
:
1) Identify which industries: products & where
2) Which groups of products/services belong to same industry
3) Competition: look at geographic scope of industry
4) Conduct single industry analysis for each group of products/services at appropriate geographical level
Competitors in an industry
Industrial classification codes
UK = SIC
EU = NACE v2
Armadeus
Strategic choices directly affect one another (Besanko et al, 2013)
Hypercompetition
4 drivers
Type of Competition
Market share
Revenues not always a good measure
Threshold % regulation
Evaluation indexes
n-firm concentration ratio
Herfindahl
If operating in more than one industry, identify correct revenue stream
Department of justice concentration levels
Passport & Statista
#
#
Industry level = meso level
Market structures