Notesale: Turn your study into money

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Is it likely that a
new entrant into
industries
dominated by a
few large
businesses would
be able to survive?
Market share is the percentage of an industry or market's total sales that is earned by a
particular company over a specified time period
...
This metric is used to give a general idea of the size of a
company to its market and its competitors
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Barriers to entry benefit existing companies already
operating in an industry because they protect an established company's revenues and
profits from being whittled away by new competitors
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It’s possible for a new entrant to survive however it does depend on the entrant
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Or if a large corporation expands by
investing into a new market then it’s likely the newly entrant will survive
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Large capital will allow the company to survive by
covering any short falls it may occur due to any mistakes made largely due to their
inexperience in the new market or gaps in their research and development
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In this scenario it’s likely a large firms expansion into
another market will soon be established and act a a main competitor for already
established few large firms
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They’ve recently expanded into the digital streaming
markets i
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However most notably came
Amazons new company in what is known as the Cloud provider market, Amazon
Web Services
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Most of these services are not
exposed directly to end users, but instead offer functionality that other developers can
use in their applications
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57 billion in the first quarter of
the year, and $265 million of operating income indicating that survival in a new
industry dominated by a few large firms is not only possible but it’s profitable
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Location of a new firm, whether in urban, metro, or
rural vicinities, can have important impacts on performance outcomes
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Dependant on the business, location in a busy area the business will occur footfall and
passing trade whilst a manufacturer will need transport links and supplier access
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Such factors will include land, labour and transport etc on the
cost sides whilst demand factors will include things such as customer convenience
and labour skills
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When
Virgin airlines first opted into the airline industry in 1996, Virgin Group bought the
Belgian leisure airline Euro Belgian Airlines and rebranded it Virgin Express
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As Virgin were operating short term flights in
Europe they faced stiff competition from Easy Jet and Ryan air and were unable to
compete with the low costs airlines financially
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Their location was essential is perpetrating this image
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The
combined airline added long haul destinations and strengthened its position in Africa
as well as flights all over the world
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To compare and contrast Amazon and virgin both
have been proactive in harnessing changes allowing their business to survive in a
industry dominated by a few large firms, despite Amazon’s survival inevitable
whether or not they survived in the market, the point is valid
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On contrast the the two
companies are quite different
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The various
leadership styles could have a significant impact when it comes to survival in a
business with autocratic arguably the most beneficial
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This is due to pricing techniques such as predatory
pricing
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The firms presented with new found competition ergo smaller revenues from
the new entrant undergo a pricing strategy in which they price their commodities or
services at a rate below profitability momentarily
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The products are elastic
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the few large firms then
proceed to raise their prices back to the original figures and make their original profit
once again, showing that it is unlikely that a new entrant in a market dominated by a
few large firms will survive
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Ryan air who carried over
400,000 passengers between the two cities were thought to undergo predatory pricing
due to the emergence of Aer Arann (a company who scheduled services on behalf of
Aer Lingus) who also began operating the journey carrying around 100,000
passengers
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The case was brought up as the subsidy was so large it would be
cheaper to purchase a taxi for each passenger
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Another reason a new entrant may not survive in an
industry dominated by a few large firms is by non – price competition
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This is a marketing strategy that is employed to
distinguish the firm’s product or service from that of its competitors in this case the
new entrant
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Even though such measures are likely to increase the
firm’s costs it enables the firm to avoid changing prices and face a short term revenue
losses
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In 2006
Apple were accused of Non-price competition in spite of competitive rises of Mp3
players to the current Ipod
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The
advertisements claimed that the usage of itunes (the leading music service) was only
compatible with the Ipod
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To compare and contrast Apple and Easyjet take up
different porters generic strategies with Ryan air operating a cost leadership approach
using their ability to cut price to defer new entrant and in this case eliminate them to
an extent
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The two generic strategies
models are both effective in dealing with the elimination of new entrants
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Such

leaders have with ruthless approaches have a quintessential impact on the success or
failure of a new entrant in a industry dominated by a few large firms
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The classification of a new firm here is important with a large firm
differentiating into a new industry despite representing the literal meaning its hard to
see how they are unlikely to survive in anyway
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Established firms will participate in pricing techniques and other
immoral practise in order to see the demise
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working together and if they’re doing it tacitly then proof is
hard to come by
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However this depends on many aspects
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In addition it
depends on the amount of government regulation and help they may provide to the
new firm subsidies could be the difference between the success and failure of the new
entrant
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