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Question: case analysis for costco wholesale in 2017 missionbusiness model and...

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5. (In the event you have covered Chapter 3) What is competition like in the North American wholesale club industry 3.4, 3.5, 3.6, 3.7, and 3.8 (and the related discussions in Chapter 3) to do a complete five-forces analysis ? Which of the five competitive forces is strongest and why? Use the information in Figures of competition in the North American wholesale club industry.
FIGURE 34 Factors Affecting Competition from Substitute Products Signs That Competition from Substitutes Is Strong .Sales of substitutes are Firms In Other Industries Offering Substitute Products How strong are competitive pressures coming from substitute products from outside the industry? Competitive pressures from substitutes are stronger when: Good substitutes are readily available or new ones are emerging .Substitutes are attractively priced . Substitutes have comparable or better performance features. End users have low costs in switching to substitutes. . End users grow more comfortable with using substitutes growing faster than sales of the industry being analyzed (an indication that the sellers of substitutes are drawing customers away from the industry in question). . Producers of substitutes are moving to add new capacity. Profits of the producers of substitutes are on the rise. Competitive pressures from substitutes are weaker when: Good substitutes are not readily available or dont exist. Substitutes are higher priced relative to the performance they deliver . End users have high costs in switching to substitutes Rivalry among Suppliers Competing Buyers Sellers n New Entrants
FIGURE 3.5 actors Affecting the Strength of Supplier Bargaining Power Suppllers of Resource Inputs How strong are the competitive pressures stemming from supplier bargaining power and Substitutes seller-supplier collaboration? Suppler bargaining power is stronger when: e Industry members incur high costs in switching their purchases to aiternative suppliers Needed Inputs are In short supply (which gives suppliers more leverage in setting prices). A supplier has a differentiated input that enhances the Rivalry among Competing Sellers quelity, performance, or image of sellers products or is a valuable or critical part of sellers production processes . There are only a few suppliers of a particular input Supplier bargalning power is weaker when: Buyers . The item being supplied is a commodity that is readily available from many suppliers at the going market price Seller switching costs to alternative supplers are low Good substitute inputs exist or new ones emerge. . There is a surge in the avalability of supplies (thus greatly weakening supplier prícing power). Industry members account for a big fraction of suppliers total sales and continued high-volume purchases are important to the well-beling of suppllers. Industry members are a threat to integrate backward into the business of suppliers and to self manufacture their own requirements New Entrants
Part 1 Section B: Core 48 FIGURE 3.6 Factors Affecting the Threat of Entry Substitutes Rivalry Among Competing Sellers Buyers Suppliers Potential New Entrants How strong are the competitive pressures assoclated with the entry threat from new rivals? Entry threats are stronger when: Entry threats are weaker when: The pool of entry candidates is large and some have The pool of entry candidetes is small. resources that would make them formidable market .Entry barriers are high contenders . Existing competitors are struggling to earn good Entry barriers are low or can be readily hurdied byprofits. the likely entry candidates Existing Industry members are looking to expand their market reach by entering productIndustry members will strongly contest the efforts of segments or geographic areas where they currently do not have a presence . The industrys outlook is risky or uncertain. Buyer demand is growing slowly or is stagnant new entrents to gain a market foothold. Ncoens aexpecto carn ettective profts. Buyer demand is growing rapidly Industry members are unable (or unwilling) to strongly contest the entry of newcomers
FIGURE 3.7 Factors Affecting the Strength of Competitive Rivalry Substitutes Rivalry among Competing Sellers How strong is seller-related competition? Rivalry Is generally stronger when: Diversity of competitors Increeses in terms of long-term directions, objectives, strategies, and countries of origin. Buyer demand is growing slowly e Buyer demand falls off and sellers find themselves with excess capacity and/or inveritory The number of rivals increases and rivals are of roughly equal size and competitive capability The products of rival sellers are commodities or else weoky differentiated Suppliers Buyers . Buyer costs to switch brands are low. High exit barrlers keep unprofitable firms from leeving the industry Typical Weapons for Battling Rivals and Attracting Buyers Rivalry is generally weaker when: Buyer demand is growing ropidy : The products of rivai selers are strongly differentiated and customer oyalty is high Buyer costs to switch brands are high, Lower prices More or different features Better product performance e Higher quality Stronger brand image Wider selection of models Bigger/better dealer notwork Low-interest-rate financing Higher levels of advertising Better customer service Product customization New Entrants
I have posted the figure 3.4,3.5,3.6,3.7 as mentioned in the questioned
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