CHAPTER 4: INDUSTRY ANALYSIS

1. Enumerate the different barriers to entry with corresponding examples. Patents Giving the firm the legal protection to produce a patented product for a number of years . Limit Pricing Firms may adopt predatory pricing policies by lowering prices to a level that would force any new entrants to operate at a loss Cost advantages Lower costs, perhaps through experience of being in the market for some time, allows the existing monopolist to cut prices and win price wars Advertising and marketing Developing consumer loyalty by establishing branded products can make successful entry into the market by new firms much more expensive. This is particularly important in markets such as cosmetics, confectionery and the motor car industry. Research and Development expenditure Heavy spending on research and development can act as a strong deterrent to potential entrants to an industry. Clearly much R&D spending goes on developing new products (see patents above) but there are also important spill-over effects which allow firms to improve their production processes and reduce unit costs. This makes the existing firms more competitive in the market and gives them a structural advantage over potential rival firms. Presence of sunk costs Some industries have very high start-up costs or a high ratio of fixed to variable costs. Some of these costs might be unrecoverable if an entrant opts to leave the market. This acts as a disincentive to enter the industry. International trade restrictions Trade restrictions such as tariffs and quotas should also be considered as a barrier to the entry of international competition in protected domestic markets. Sunk Costs Sunk Costs are costs that cannot be recovered if a businesses decides to leave an industry Examples include: " Capital inputs that are specific to a particular industry and which have little or no resale value " Money spent on advertising / marketing / research which cannot be carried forward into another market or industry When sunk costs are high, a market becomes less contestable. High sunk costs (including exit costs) act as a barrier to entry of new firms (they risk making huge losses if they decide to leave a market Give 5 examples of substitutes to buy Goya chocolate than Ferrero to buy motorcycle than a car to use linoleum than tiles to have a bottled water than chowking halo halo to use sleeper than shoes

2. Give at least 5 examples of bargaining power of supplier. Is the only main source of electricity in manila so people should pay on what meralcos cost Nawasa is the source of water monopolize the supply of water. PETRONAS Energy oil and gas supplier SM dominates other malls because the are the malls that provides all your need in one place

3. Give at least 5 examples of bargaining power of buyer Divisoria has a lot of same products that result to buyer to enable to have discounts . Malls give discounts up to 70 percent when their product didnt able to sell such as secosana because of competition Product which are perishable such as milk , give as a sale when the expiration date is near Products are combined one as a item to be sold and the other as a free to catch the eye of the buyer Additional content are offers such as milk , powdered juice etc if their product is not sale able

Summary: The Porter's Five Forces tool is a simple but powerful tool for understanding where power
lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into.

With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations.

CHAPTER6: X AND Y THEORY

Summary:
McGregor developed a philosophical view of humankind with his Theory X and Theory Y in 1960. His work is based upon Maslow's Hierarchy of Needs, in that he grouped the hierarchy into lower-order needs (Theory X) and higher-order needs (Theory Y). He suggested that management could use either set of needs to motivate employees, but better results would be gained by the use of Theory Y, rather than Theory X. These two opposing perceptions theorized how people view human behavior at work and organizational life,theory X, With Theory X assumptions, management's role is to coerce and control employees, People have an inherent dislike for work and will avoid it whenever possible, People must be coerced, controlled, directed, or threatened with punishment in order to get them to achieve the organizational objectives, People prefer to be directed, do not want responsibility, and have little or no ambition., People seek security above all else.and Theory Y assumptions,
management's role is to develop the potential in employees and help them to release that potential towards common goals,Work is as natural as play and rest,People will exercise self-direction if

they are committed to the objectives (they are NOT lazy),Commitment to objectives is a function of the rewards associated with their achievement,People learn to accept and seek responsibility,Creativity, ingenuity, and imagination are widely distributed among the population. People are capable of using these abilities to solve an organizational problem,People have potential. Intellectual creativity cannot be 'programmed' and directed the way we program and direct an assembly line or an accounting department. This kind of intellectual contribution to the enterprise cannot be obtained by giving orders, by traditional supervisory practices, or by close systems of control. Even conventional notions of productivity are meaningless with reference to the creative intellectual effort. Management has not yet considered in any depth what is involved in managing an organization heavily populated with people whose prime contribution consists of creative intellectual effort. from Douglas McGregor's essay, New Concepts of Management.

CHAPTER 5: GENERIC STRATEGY

1 What is the generic strategy of the following company:

Magnolia is a Philippine brand of ice cream sold domestically in the Philippines and in other markets such as Thailand, the United States, Australia, Malaysia, and Singapore. Low cost strategies tropical ice cream flavours include Halo-halo (a mix of fruits and beans), Buko Pandn (young coconut with pandan), MasQueso (corn and cheese),avocado, Nangkasy (jackfruit with cashew), Ube and Buko Salad (young coconut and fruit), and Macapuno (coconut sport). The brand also offers mango and other flavours like chocolate, strawberry, and vanilla.They also sell special-edition ice cream dubbed "Flavor of The Month," which is only sold for a month Mercedez benz focus based strategies , because this car can be only bought buy those rich millionaire Mercedes-Benz has introduced many technological and safety innovations that later became common in other vehicles.Mercedes-Benz is one of the most well-known and established automotive brands in the world, and is also the world's oldest automotive brand still in existence today Repertory Philippines Tupperware the name of a home products line that includes preparation, storage, containment, and serving products for the kitchen and home, which were first introduced to the public, upperware develops, manufactures, and internationally distributes its products by as a wholly owned subsidiary of its parent company Tupperware Brands Corporation and it is marketed by means of direct sales through an independent sales force of approximately 1.9 million consultants 7-11 stores -Eleven is part of an international chain of convenience stores, operating under Seven-Eleven Japan Co. Ltd 7-Eleven, primarily operating as a franchise, is the world's largest operator, franchisor and licensor of convenience stores, with more than 39,000 outlets,]surpassing the previous record-holder McDonald's Corporation in 2007 by approximately 1,000 retail stores. Low cost strategies started selling milk, eggs and bread from an ice house small grocery stores and general merchandisers were present in the immediate area,
selling convenience items, such as bread and milk, was popular due to the ice's ability to preserve the items.

2.Broad cost

-Charmee napkin ,Rejoice Shampoo ,Nestle,Selecta ,Johnson Focus cost -louis viutton, Gucci , Chanel , Fendi, Burberry, Dior, Prada, Versace, Hermes

CHAPTER 5: GENERIC STRATEGY

Summary:
Generic strategies were used initially in the early 1980s, and seem to be even more popular today. They outline the three main strategic options open to organization that wish to achieve a sustainable competitive advantage. Each of the three options are considered within the context of two aspects of the competitive environment: The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. Factories are built and maintained, labor is recruited and trained to deliver the lowest possible costs of production. 'cost advantage' is the focus. Costs are shaved off every element of the value chain., Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin. The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments, generating a higher than average price. For example, British Airways differentiates its service.and The focus strategy is also known as a 'niche' strategy. Where an organization can afford neither a wide scope cost leadership nor a wide scope differentiation strategy, a niche strategy could be more suitable. Here an organization focuses effort and resources on a narrow, defined segment of a market. Competitive advantage is generated specifically for the niche. A niche strategy is often used by smaller firms. A company could use either a cost focus or a differentiation focus.

In Partial fulfilment Of the requirement In

Finance I
Submitted to: Mrs. Marisa Cardema Submitted by: Karen Palafox CA6-A2

MCDONAL DS USA MCDONAL DS PHILIPPI NES 1955 MANG INSAL ILO-ILO 1950

1981 METRO MANILA 2003 2001 1980 2006 ADULTS ANLENE TEENS KIDS