Competing in the Global Market

• Global competition impacts:

– industry structure
– degree of competition
– firm’s national origin and the competitive
advantage of nations
• Competitive position
– costs, market share, price quality, accumulated
experience
• Competitive forces - Five Forces Analysis
 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.
• 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
 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.
• Always a main market leader
• influences the way business is done
• strong relationship with sources of supply
• control over distribution networks
 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
• 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
Which UK digital is best?
Waste Recycling?
 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?