3. Threat of Entry - Porter’s Five Forces Model Importance of barriers to entry Economies of scale First mover cost advantages Capital required Government/legal barriers Control of distribution Product differentiation Higher the barriers, higher the profitability Example: Telecom industry
4. Buyer Power- Porter’s Five Forces Model Price sensitivity x Bargaining power Cost of purchase vs total costs Profitability of buyers Size & concentration of buyers relative to suppliers Buyers switching costs Buyer’s information Ability to integrate backwards Example: Auto parts industry Bargaining power of auto manufacturers reduces profitability of auto parts industry
5. Threat of Substitutes- Porter’s Five Forces Model Willingness to substitute Price-performance of substitutes Example: Frozen food industry Prices limited by prices of canned & fresh foods
6. Competitor Rivalry- Porter’s Five Forces Model Increase rivalry, lower profitability: Low industry concentration Slow demand growth High fixed costs Homogeneous goods Example: Chemicals industry
7. Case Study: XYZ Co. Background Privately owned grocery store 139 food stores in Oregon & California 1,431,770 shares of common stock outstanding 78,031 (5.45%) are offered for sale You are retained by John Smith, prospective minority shareholder Objective: Value 5.45% ownership interest
10. www.HelpWithAssignment.com www.HelpWithAssignment.com provides seamless online tuitions, Assignment help, Homework help and Thesis and Dissertation help to college and University students. HwA provides online tutoring sessions of 30 minutes, 60 minutes or 120 minutes covering a variety of subjects. The specialty of HWA online tuitions are:•Conducted by experts in the subject taught •Tutors selected after rigorous assessment and training •Tutoring sessions follow a pre-decided structure based on instructional design best practices •State-of-the art technology used With a whiteboard, document sharing facility, video and audio conferencing as well as chat support HWA’s one-on-one tuitions have a large following. Several thousand hours of tuitions have already been delivered to the satisfaction of customers.In short, HWA’s online tuitions are seamless, personalized and convenient.