Posted: March 2nd, 2022

What forces drive industry competition?

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What forces drive industry competition? Are these factors the same globally or do they vary from the country?  Rate each fore as high, medium, or low.
The threat of new entrants: high
Bargaining power of the buyer: medium
The threat of substitute products or services: high
Bargaining power of supplier: medium
Rivalry among competing firms: low
The relative power of unions, government, special interest groups. Etc.: high
What key factors in the immediate environment (customer, competitors, supplier, creditors, labor union, government, trade associations, interest groups, local communities, and shareholders) are currently affecting the corporation? Which are current or future threats? Opportunities?
Corporations operate under a series of challenges that they are forced to overcome daily to meet their objectives. While some firms may routinely meet the underlying obstacles to eliminate the threats of their environment, different groups in the environmental growth of the firm have widely affected the way a firm performs, meaning it is harder for the firm to meet its objectives (Cusumano, p.9). While one firm may experience difficulty based due to the influence of one group, it is essential to note some of the groups do not fully pose a greater threat at most in the corporate environment.
Governments are among the most effective group members that affect the growth and development of a corporation. Corporations have to comply with a series of government demands that may have devastating effects on their expansion and growth. While most of the firms depend on the government as a protective agent and foster a fair, competitive environment through regulations, some of the corporations find government legislation to be among the obstructions limiting their performance.
Labor unions have posed both current and future threats in the business world, as their demand to support the common workers tends to work mostly against the firm. Therefore, most firms are pushed to the wall to comply with the defined labor union at hand. It is essential to understand the importance of having a trade union as a company for transparency.
Competitors are another major player in providing a huge threat in any corporation. In this case, competitors tend to reproduce services or products similar to what the other company is offering in the market. However, both the companies continue to scramble for a limited consumer base that does not expand simultaneously with the new entry of competitors in the market. Competitors are a direct threat to a company, especially where the firm entering the market has a better monetary backing that provides more financial expansion of the firm. As a result, small or struggling firms are highly affected since they cannot match the pace of the new competitor.
Trade associations are widely used for both present and future diagnosing of a firm and ensuring that a company remains within the operation based on the current trade associations. Despite their present role, they are a huge future threat in a firm, as political instability may override the relationship between two or more countries engaging a trade association, future changes in the political arena may have a devastating impact on a firm, making it suffer a huge financial loss, or losing its market position.
The growth of the firm and the exact development are widely dictated by the degree of investors in a firm. Investing in a business is a gamble that requires the effectiveness of understanding the firm to improve its financial position (Simbolon, p.4). Investors are an opportunity to a firm, and their input plays a vital role in developing the firm’s growth. As a result, it is essential to understand that investors play a wide role in providing an opportunity for the firm

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