MGMT 3000 Lecture Notes - Lecture 5: Customer Switching, Switching Barriers, Bargaining Power

• School: University of Georgia
• Department: Management
• Course: MGMT 3000
• Professor: charleswaynelyons

Document Summary

How does the threat of new entrants partially explain the airline industry. Bargaining power- the pressure that a supplier or buyer can exert on a company. A supplier will tend to be powerful when: industry is more concentrated. Innovation streams: techn discontinuities, discontinuous change, dominate design. Industry rivalry is more intense when: fixed costs are high, and marginal costs are low. Airplane- cost a lot to buy, cheap to put a passenger on the airplane. Hotel: industry products or services lack differentiation or switching costs, there is overcapacity, or capacity must be expanded in large increments, the industry"s product is perishable or highly cyclical. Seasonal food: rival competitors are numerous or are roughly equal in size and power, industry growth is slow.