Competing in the Global Market

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Competing in the Global Market

• Global competition impacts
• industry structure
• degree of competition
• firms national origin and the competitive
  advantage of nations
• Competitive position
• costs, market share, price quality, accumulated
  experience
• Competitive forces - Five Forces Analysis

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Fragmented Industries

• Populated by a large number of Small Medium
  Enterprises Porter
• Absence of market leaders with the power to
  influence events.
• Where
• low barriers to entry
• transport costs are high
• local image important etc.

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• A fragmented industry may become consolidated
  with
• technological change
• standard product preferred over customised one
• large publishing companies with small imprints
• Consolidate naturally with age
• Without consolidation a firm can specialise and
  grow by
• offering a standard product or service
• dealing with particular customers
• Concentrating on a particular area

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Concentrated Industries

• Dominated by a small number of large firms,
  exercising significant influence over the market
• How does this happen?
• Cheap to produce in bulk
• Significant resources to stay in business
• High barriers to entry etc.

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• Always a main market leader
• influences the way business is done
• strong relationship with sources of supply
• control over distribution networks

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Emerging Industries

• New or reformed industry
• e.g electronic publishing and interactive TV -
  FT, New York times, Digital TV.
• e.g Waste recycling - BMW, Winchester City
  Council
• e.g Internet browsers - Netscape Navigator
• e.g Road pricing systems - Toll systems for
  bridges and motorway

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• Problems with emerging industries
• lack of faith in technology
• innovative product where customer needs are as
  yet unknown
• high initial start up costs
• potential customers need to be kept informed of
  developments
• early barriers to entry e.g raw materials
• competition for components
• customer confusion
• Obsolescence
• Erratic quality
• Scepticism from bankers and investors

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Which UK digital is best?
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Waste Recycling?
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Link in with . . .

• Kenichi Ohmae - Globalisation means businesses do
  not have a nationality, but shared values
• Levitt Globalisation of Markets
• Competitive Advantage of Nations (last week)
• Kotler - Where do we go from here?