COMMERCE 4PA3 Lecture Notes - Lecture 2: Switching Barriers, Bargaining Power, Cannabis Industry

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 4PA3
• Professor: Nick Bontis

Document Summary

Barriers to entry; economies of scale, government policy, brand identity, capital requirements, learning curve. If you need a licence it makes it harder to enter the industry. First thing to look at is barriers to entry; if barriers to entry are high, threat of new entrants is low. Co(cid:374)ti(cid:374)ge(cid:374)t o(cid:374) s(cid:449)it(cid:272)hi(cid:374)g (cid:272)osts; if s(cid:449)it(cid:272)hi(cid:374)g (cid:272)osts are lo(cid:449), it"s eas(cid:455) for (cid:272)usto(cid:373)ers to go so(cid:373)e(cid:449)here else. Co(cid:374)ta(cid:272)t le(cid:374)ses a(cid:374)d laser e(cid:455)e surger(cid:455) are su(cid:271)stitutes as the(cid:455)"re o(cid:374) (cid:272)o(cid:373)pletel(cid:455) differe(cid:374)t cost ranges. Bus and train are competitors since they take about the same time to get there and prices are similar. Need to look at how many they are; boeing and airbus are main 2 suppliers so they have high amount of power. If there"s a to(cid:374) of suppliers, the(cid:455) ha(cid:448)e less po(cid:449)er. If it costs a lot for the input they have power.