industry analysis in metals company

CFA Level II
#1

what i the company’s competitive advantage?

#2

barrier of entry cause its capital intensive

#3

def barriers to entry and it was cyclical firm

#4

ditto

#5

barrier to entry. I think the vignette stated that economies of scale were a factor.

#6

which industry cycle? Some people say cyclical? But I thought it was maturing. It had problems making profits for years and had to cut costs.

#7

It talked about how its profits were variable due to changing input prices that moved with the business cycle. Absolutely cyclical.

#8

barriers of entry…economies of scale…and they asked what the most common risk of their strategy (cost leadership), for them it stated cost proximity, but for that strategy, the most common risk is differentiation parity.

#9

cyclical. Revenue was dependent on the economy. Also, one of the factors (either profit margins, roe, etc…) wasn’t a match for maturing. I forget the specifics though.

#10

what about the question that asked what is the biggest risk to the company’s strategy… two of the choices were segment becomes structurally unattractive or larger competitors overwhelm the market. there was a line mentioning the company had invested in blah blah, so competition was less likely, so I picked target becomes structurally unattractive.

#11

folks, it cannot be barriers to entry. there are 50 firms inside this industry. the industry has no herfinal index. with so many firms and widespread competititon, how is there a barrier to entry???

#12

what were the other two options there? i poicked one of those

#13

milkpump Wrote: ------------------------------------------------------- > folks, it cannot be barriers to entry. there are > 50 firms inside this industry. the industry has > no herfinal index. with so many firms and > widespread competititon, how is there a barrier to > entry??? There are still barriers for additional firms because it’s capital intensive. The other options were suppliers (specifically said strong suppliers), buyers (specifically said strong buyers) and rivalry (it said high rivalry).

#14

i think i chose “rivalry” because I was so angry with CFAI.

#15

What was the firm’s competitie strategy?

#16

milkpump Wrote: ------------------------------------------------------- > folks, it cannot be barriers to entry. there are > 50 firms inside this industry. the industry has > no herfinal index. with so many firms and > widespread competititon, how is there a barrier to > entry??? The vignette said there were barriers to entry. Also said it was very capital intensive

#17

lxwqh Wrote: ------------------------------------------------------- > i think i chose “rivalry” because I was so angry > with CFAI. i also choose rivaly b/c of the low HH index…the firms were intensively competing with each other

#18

rivaly as a competitive strategy?! What is the question?

#19

rjs157 Wrote: ------------------------------------------------------- > lxwqh Wrote: > -------------------------------------------------- > ----- > > i think i chose “rivalry” because I was so > angry > > with CFAI. > > > i also choose rivaly b/c of the low HH index…the > firms were intensively competing with each other But they were asking how the company maintains profitability. Intense rivalry reduces profitability.

#20

It was barriers to entry because a big factor was transportation cost of metals and they had local suppliers that they worked with.