So this industry is not attractive? With no threat of substitutes, no threat of new entry?? I just want to make sure that is what CFAI is saying, for the answer explanation is very unclear on this one (at least to me…) Thx
But buyers have lots of power, there are 2 very powerful and large competitors, and its fully mature. Yes, it’s not attractive, and that company has bad positioning within it.
thanks smarshy! i guess an industry has to be relatively strong in all porter categories to be attractive…
no not necessarily…there is a bit of judgement with it. but here are some points that to consider 1. the poter;s model is about determining whether the industry is profitable - it could be two factors against and two for but the two for may be so strong that it tilts in favourof the industry. 2. If the industry is profitable can the player get its ‘good’ share of that profitability? In this case the giants were already there commanding all the profits, plus using part of it to fight among themselves - a good way to throw away some of the profits to either suppliers, if theyhave the power or to consumers through reduced pricing etc. i hope this helps…
I would be nice in the PDF actaully told you what the correct answer was… I couldn’t tell anyway. 2 factors are attractive, and 2 are not… wtf is the answer??
man i wish i could get teh Letter Answers wtf is up with not giving them