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Industry Analysis- business research that focuses on the potential of an industryIndustry- a group of firms producing a similar product or serviceCompetitor Analysis- detailed evaluation of a firm’s competitorsIndustry AnalysisWhen you study an industry ask yourself 3 three questions1.Is the industry accessible?2.Does the industry contain markets that are ripe for innovation or are underserved?3.Are there positions in the industry that will avoid some of the negative attributes of theindustry as a whole?PositionCompany level a firm’s position determines how the company is situated relative to itscompetitorsIndustry Trends1.Environmental trends - Vitamin Water became popular because of the renewedemphasis on health and staying fit2.Business trends - some firms may benefit from an increasing ability to outsourcemanufacturingTrade Association / Trade Shows / Trade Journals page 174The Five Forces Modelis a framework entrepreneurs use to understand an industry’s structure1.Threat of Substitutesa.Preferably low so people use your Sweet’N Low rather than Sugar in the Raw2.Threat of New Entrantsa.There are techniques to prevent people from barging in on your industry (barrierto entry)i.Economies of Scale- occurs when mass-producing a product results inlower average costsii.Product Differentiation- it would be mighty costly to contend againstApple laptops or PepsiCo sodasiii.Capital Requirements- need large sums of money to enter, theautomobile industry is an example of thisiv.Cost Advantages Independent of Size- perhaps a landscaping company
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1.Explain the purpose of an industry analysiso2.Does the industry contain markets that re ripe for innovation or an
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•Studying Industry trends:oEnvironmental trendsoBusiness trends2.Identify and discuss the 5 competitive forces that determine industry profitability (Porter)
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3.Explain the value that entrepreneurial firms create by successfully using the 5 forces model•Can be explained in 2 ways?
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Professor
denisbeauschesne
Tags
Business, Entrepreneurship, entrepreneurial firms, entrepreneurial firm, Ireland Chapter