Case Study: CHIBAN LEATHER DESIGNING THE NEXT CHAPTER

Question:
Consider the leather industry in Ethiopia and Chiban’s role in the value chain. How do competition, substitute products, the power of buyers and suppliers, and new market entrants affect Chiban?

A competitive strategy of striving to be the low-cost provider is particularly attractive when:

A) buyers are not price sensitive.

B) the industry is made up of a large number or equal-sized rivals.

C) there are many ways to achieve product differentiation that have value to buyers.

D) price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers.

E) switching costs are high, price competition is strong, and buyers tend to use the industry's products in many different ways.