1 thought on “The performance of the industry competition of potential entrants”
Melanie
Potential entry is another element that affects the intensity and profitability of the industry. The main manifestations are three direct influence: 1 is that the industry will increase the industry's effective capital volume due to the actual entry of potential entry; Fighting and diversion; The third is that the industry will compete and divert upstream resources due to the actual entry of potential entryrs. The impact of potential entryrs on the profitability of the industry is multiple, which is closely related to the development cycle of the industry, and is closely related to the strength and competitive strategy of potential entryrs. The analysis should be different. The Potter Five Power model simply regards the potential entry as a threat, which is too one -sided. Generally speaking, when the industry is in the introduction period, potential entrants will play more places to cultivate the market, that is, although industry capital K increases due to its entry, the valid market demand Q Q Q q Because its entry will also increase, if the valid demand Q increases faster than the growth of the industry's capital K, it is beneficial to the industry as a whole. Borrowing the principle of learning curve, in the industry introduction period, with the entry of potential entrants, the industry's production volume continues to expand, the industry's production capacity will increase, the production cost of unit products will be reduced rapidly, and the industry's profitability will be improved. It on other life cycle stages of the industry, the impact of potential entrants should also be analyzed according to the actual situation. Generally speaking, at the period of growth, due to the rapid growth of demand, potential entrants have diverted demand, and intuitively seemingly not conducive to competitors in the industry. However, due to the rapid growth of demand, the existing production capacity in the industry may not meet the demand for rapid growth. If there are no new joins, the uncomfortable demand may seek alternatives. The needs of the industry affect the industry's profitability. When the industry is in a mature period, demand has grown slowly, competition tends to be fierce, and the industry's attractiveness tends to decline. Potential entryrs often do not choose to enter. However, although the demand for maturity has grown slowly, the total demand is very large. From the perspective of cash flow, it is still attractive to some potential entrants. When the industry is in a recession, the demand has begun to shrink, the capital yield of the industry declines, and some companies choose to withdraw money and withdraw. The threat of potential entryrs may not decrease to mature and decline periods. At this time, the potential entryrs with strong strength may still choose to enter. Often, the relevant assets are obtained by low prices through mergers and acquisitions, reorganizations, etc., and have a great impact on enterprises in the industry with their own advantages. The factors to enter the barriers The height of the barriers depends mainly on the following factors:
economics. If the production of the original enterprises in the industry has reached a certain scale, if the new entryrs enter the industry at a smaller scale, it will be in a cost disadvantage position. The business characteristics and user loyalty. If the existing companies in the industry have established a better corporate image and users have a higher loyalty, then the new entryrs want to establish a good corporate image and obtain the trust of users, and they will pay a considerable price. investment requirements. If the industry requires high investment in one -time investment, then the industry's barriers to potential entrants are higher. A resource supply. If the existing companies in the industry have established a good and stable supply relationship with raw materials and technical supply channels, the entry barriers of new entrants are quite high. Therefore, before entering the industry, new entrants must do a good job of investigation and research on resource supply. Sales channels. If the new entry also wants to enter the good sales channels that the existing enterprises have established, they often require new entrants to provide more preferential prices or strengthen advertising, which also constitutes the barriers to enter the new entry. The experience curve. If the existing companies in the industry have mastered some technical tricks, have accumulated rich production experience, workers are proficient in operation, and the low waste rate will cause low cost. This cost factors will also constitute the barriers to enter the new entry. Government policy. The state promulgates licenses (such as pharmaceuticals, foods, posts and telecommunications, communication equipment, etc.), or strict control of certain raw materials, which will form a major entry barrier to new entrants. The response of the original enterprise. If the expected revenge of the original enterprises in the industry is strong, then the barriers to the entry of potential entrants are higher.
Potential entry is another element that affects the intensity and profitability of the industry. The main manifestations are three direct influence:
1 is that the industry will increase the industry's effective capital volume due to the actual entry of potential entry; Fighting and diversion;
The third is that the industry will compete and divert upstream resources due to the actual entry of potential entryrs.
The impact of potential entryrs on the profitability of the industry is multiple, which is closely related to the development cycle of the industry, and is closely related to the strength and competitive strategy of potential entryrs. The analysis should be different. The Potter Five Power model simply regards the potential entry as a threat, which is too one -sided.
Generally speaking, when the industry is in the introduction period, potential entrants will play more places to cultivate the market, that is, although industry capital K increases due to its entry, the valid market demand Q Q Q q Because its entry will also increase, if the valid demand Q increases faster than the growth of the industry's capital K, it is beneficial to the industry as a whole. Borrowing the principle of learning curve, in the industry introduction period, with the entry of potential entrants, the industry's production volume continues to expand, the industry's production capacity will increase, the production cost of unit products will be reduced rapidly, and the industry's profitability will be improved.
It on other life cycle stages of the industry, the impact of potential entrants should also be analyzed according to the actual situation. Generally speaking, at the period of growth, due to the rapid growth of demand, potential entrants have diverted demand, and intuitively seemingly not conducive to competitors in the industry. However, due to the rapid growth of demand, the existing production capacity in the industry may not meet the demand for rapid growth. If there are no new joins, the uncomfortable demand may seek alternatives. The needs of the industry affect the industry's profitability.
When the industry is in a mature period, demand has grown slowly, competition tends to be fierce, and the industry's attractiveness tends to decline. Potential entryrs often do not choose to enter. However, although the demand for maturity has grown slowly, the total demand is very large. From the perspective of cash flow, it is still attractive to some potential entrants. When the industry is in a recession, the demand has begun to shrink, the capital yield of the industry declines, and some companies choose to withdraw money and withdraw. The threat of potential entryrs may not decrease to mature and decline periods. At this time, the potential entryrs with strong strength may still choose to enter. Often, the relevant assets are obtained by low prices through mergers and acquisitions, reorganizations, etc., and have a great impact on enterprises in the industry with their own advantages.
The factors to enter the barriers
The height of the barriers depends mainly on the following factors:
economics. If the production of the original enterprises in the industry has reached a certain scale, if the new entryrs enter the industry at a smaller scale, it will be in a cost disadvantage position.
The business characteristics and user loyalty. If the existing companies in the industry have established a better corporate image and users have a higher loyalty, then the new entryrs want to establish a good corporate image and obtain the trust of users, and they will pay a considerable price.
investment requirements. If the industry requires high investment in one -time investment, then the industry's barriers to potential entrants are higher.
A resource supply. If the existing companies in the industry have established a good and stable supply relationship with raw materials and technical supply channels, the entry barriers of new entrants are quite high. Therefore, before entering the industry, new entrants must do a good job of investigation and research on resource supply.
Sales channels. If the new entry also wants to enter the good sales channels that the existing enterprises have established, they often require new entrants to provide more preferential prices or strengthen advertising, which also constitutes the barriers to enter the new entry.
The experience curve. If the existing companies in the industry have mastered some technical tricks, have accumulated rich production experience, workers are proficient in operation, and the low waste rate will cause low cost. This cost factors will also constitute the barriers to enter the new entry.
Government policy. The state promulgates licenses (such as pharmaceuticals, foods, posts and telecommunications, communication equipment, etc.), or strict control of certain raw materials, which will form a major entry barrier to new entrants.
The response of the original enterprise. If the expected revenge of the original enterprises in the industry is strong, then the barriers to the entry of potential entrants are higher.