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What are the determinants of firm profitability inan industry? What prevents less profitable firms from becoming more profitable? In your answers to these questions, include a discussion of industry evolution, strategy execution and vertical integration.
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What are the determinants of firm profitability in an industry? What prevents less profitable firms from becoming more profitable? In your answers to these questions, include a discussion of industry evolution, strategy execution and vertical integration. Competition, buyer and supplier power, substitutes, potential entry, cooperation and complementary products/services are the determinants of firm profitability in an industry. They are primary industry forces. The first five may drive profits down by forcing prices down or costs up and prevent less profitable firms from becoming more profitable. The last two may increase profits by allowing price increase or cost decrease. The evolving stage of an industry determines the strength of these individual industry forces, competitive or cooperative landscape and the degree of impact on firm profitability. As a new industry starts with new product/service solutions to meet high market demands, this industry or market is growing rapidly. At this stage, the evolutionary path...
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