Definition Of Industry And Porter Economics Essay

Definition Of Industry And Porter Economics Essay This chapter presents a basic explanation of how the pharmaceutical industry will be defined and which models will be used to analyse it. 2.1 Definition of Industry The most important definition of industry was given by Michael Porter in 1979: a group of competitors producing substitutes that are close enough that the behavior of any firm affects each of the others either directly or indirectly.  [1]  Later, Porter defined the term more precisely as a group of companies offering products or services that are close substitutes for each other, that is, products or services that satisfy the same basic customers needs.  [2]  This new definition emphasizes the importance of industry borders and industrys role as a market supplier or producer of goods and services, as distinguished from a market, defined as a consumer of goods and services. Furthermore, inside every industry there are groups of companies that follow similar strategies, defined by Michael S. Hunt in his unpublished 1972 Ph.D. dissertation as strategic groups.  [3]  Between these groups there are differences in entry barriers, bargaining power with buyers and suppliers and skills and resources  [4]  . Strategic groups compete against each other within the industry as a result of these differences. 2.2 Models to Analyze the Industry and Its Environment The literature agrees that comprehension of the industry structure is essential to developing a firms strategy and has a greater effect on the firms performance than whether it is business-specific or corporate-parent.  [5]  The comprehension of the structure requires analyses of the industrys life cycle. It also requires step-by-step political, legal, technological, social and economic analyses as well as the five driving forces of business, provided by Michael Porter. By utilizing these analysis techniques, it is also possible to anticipate changes in industry competition and profitability over time. 2.2.1 Industry Life Cycle Analysis During its development an industry passes through different phases, each characterized by a different environment that obliges competition to assume different forms. Through studying the life cycle, the industry realizes its stake in the market and its influence on consumers. The industry life cycle model includes four different phases: introduction, growth, maturity and decline.  [6]   The introductory phase is characterized by low demand, resulting in higher prices as a consequence of the firms inability to realize economies of scale. This situation gives rise to low profit margins and losses are expected due to substantial investments in new categories. Market penetration may be obstructed by a lack of technologies and competencies. Strategy is focused mainly on RD and production, with the goal of enhancing novelty and quality. Competitors, attracted by the rising demand, attempt to replicate the new product.  [7]   In the second phase, growth, the use of the product is extended, demand grows, prices decline due to economies of scale, barriers to entry are lower and the threat of new entry is high. At this phase the technology is usually not exclusive property of one or more firms, and the primary reaction to competition is marketing expenditure and initiatives; profits are not very high because prices decline as competitors enter the market. There is a transition period, or shakeout, between the second and the third phases. The shakeout involves finding and using all investment opportunities, because the market is near saturation and demand grows more slowly.  [8]   In the third phase, maturity, market growth is low or nonexistent, and the focus shifts to gaining market share; demand is represented only by the substitution of products, investment in RD decreases and there is little innovation. In this phase firms seek cost reductions, and competition is based primarily on advertising and quality because of the low differentiation between products. Big firms acquire smaller players, while others are forced to exit. As a conseguence of high barrier to entry, the threat of new entrants are low.  [9]   The last phase is decline, so called because of the continued decline in demand. Industries arrive at this stage for a variety of reasons. These include a change in social behaviors, demographic changes, international competition, technological innovations and increased customer knowledge. The buying process is based primarily on price rather than innovation. As a result, profit and revenues decline, and the industry as a whole may be supplanted.  [10]   2.2.2 PEST Analysis The term PEST is an acronym of several factors Political, Economic, Social and Technological that influence business activities at any given moment. Due to the fact that each aspect may have an independent impact on the industry, it is essential that each be individually identified and analyzed through the PEST Analysis.  [11]   The political aspect of analysis encompasses various factors that influence business activities in a given country at several levels: national, subnational and supranational levels.  [12]  These include trade policies control imports, exports and international business partners, government ownership of industry, attitude toward monopolies and competition and trade policies. Hence, failure to consider these policies may result in loss of revenue due to taxes or penalty fees. Government stability is also very important, because it eradicates the risks associated with wars and conflicts. For an industry to thrive, political stability must be uncompromised; otherwise, sales and business activities will be uncertain, and investors will lose interest. The internal political issues in any country influence the running of industries. Politics based on race or religion may define the course for certain industries, especially if an industry falls short of political expectations. Elections and changes in leadership also influence an industrys strengths and opportunities and thus should be considered during the analysis. In addition to internal issues, international pressures and influences may affect some industries, such as environmental degradation or product safety. Another factor is terrorism. Though uncommon in many countries, poor or unstable governance may attract terrorist activities, vengeful or otherwise, which can have adverse effects on the industries operating in that country. All these issues may stunt industrial growth and discourage stakeholders from making significant investments.  [13]   The economic aspect of analysis includes many factors. The first factor to consider is the current economic situation and trends in the country in which the industry is based. Companies should note inflation and economic decline so that when it comes to investing, they can avoid being financially affected. Failure to do this results in an economically blind platform that may cause the industrys sudden collapse. Another factor to consider in analysis is taxation rates. When there are high taxation rates in a given country, price-based competition may affect a given industry in the international market. International economic trends are also very important, because they define currency exchange rates, imports and exports. Other factors to consider are consumer expenditure and disposable income and, finally, legal issues, including all trade legislation in a given country and other legal regulations that inhibit or encourage expansion of business activities. Also to be considered are co nsumer protection laws, employment laws, environmental protection laws and quality standardization regulations. Law regulating industrial competition, market policies and guidelines also have a significant impact on the stability of industry and future expansion opportunity.  [14]   When considering the social aspect, factors including demographic changes, shifts in values and culture and changes in lifestyle are important to note so as to strategize on expansion and growth  [15]  . Certain factors, such as media and communities, influence an industrys growth and returns. Brand name and corporate image are also very important in influencing growth and returns since they shape customer loyalty and shareholder investment. The medias views on certain industrial products should be incorporated into the analysis, as should consumer attitudes and sensibility to green issues, that is, issues that affect the environment, energy consumption and waste and its disposal. A companys information systems and internal and external communications should also be analyzed to ensure that it keeps pace with its competitors. Other factors are the policies regulating education, health and distribution of income, all of which, in the long run, influence consumer use of products   [16]  . The technological aspect of analysis encompasses a variety of factors. In addition to developing technologies, all associated technologies, along with their innovation potentials, speed of change and adoption of new technology, should be analyzed for a proper evaluation of the industry. Other technological factors are transportation, waste management and online business. The level of expenditure on RD should also be considered in order to secure the industrys competitive position to prevent losses and collapse  [17]  . 2.2.3 Porters Five Competitive Forces Analysis Porters model, as described by Kay, is an evolution of the Structure-Conduct-Performance paradigm conceived by Edward Mason at Harvard University in the 1930s and detailed by Scherer in the 1980s.  [18]  ,  [19]  The model aims to determine the intensity of industry competition, major issues in determining strategy and whether an industry is attractive or not.  [20]  Porter identified five competitive forces that act on an industry and its environment: threat of entry, intensity of rivalry among existing competitors, threat of substitutes, bargaining power of buyers and bargaining power of suppliers.  [21]   The first competitive force, threat of entry, refers to the threat of new entrants in an established industry or acquisition to gain market share. Reactions of participants and barriers to entry are the main factors used to establish whether the threat is high or low. Six major entry barriers have been identified: capital required to compete in the industry (especially in risky industry, such as advertising or RD) switching costs access to distribution channels economies of scale cost disadvantages independent of scale, such as patents, access to know-how, access to limited resources, favorable locations, government subsidies or policies and learning or experience curves product differentiation expected retaliation from existing firms against the new entrants Strong barriers to the entry of new firms enable a few firms to dominate the market and thereby influence prices. The second force is intensity of rivalry among existing competitors. Rivalry takes place when one or more firms inside an industry try to improve their position using tactics such as price competition, new product introduction or new services. Rivalry depends on several factors: number and size of competitors, industry growth, product characteristics (which determine whether the rivalry is based on price or differentiation), cost structure, exit barriers, diverse competitors, operative capacity and high strategic stakes. If an industry is inhibited, then firms will experience difficulties when trying to expand. The growth of foreign competition and the corporate stakes should also be included in the analysis. Threat of substitutes is the third forces. Substitutes are those products manufactured by other industries but serving the same purposes as the initial product. These substitute products cause the demand to decline. The implications are reduced profits and reduced market command by the original capital investor. This is of particular importance when the buyer has no switching costs and can easily compare products in terms of price and efficiency. Bargaining power of buyers is the fourth force. High bargaining power positions weak firms inside the industry, forcing price down, enhancing competition between industry players and resulting in bargaining for higher quality or services. This power is particularly high under certain conditions, such as few and specific buyers, undifferentiated products, low switching costs, the possibility of backward integration and information about demand and the availability of market price to the buyers. Furthermore, bargaining power is high if product quality is not a crucial factor of decision-making and if what the buyer is acquiring is a modest fraction of his total costs. Bargaining power is even higher when the buyer is a retailer or a wholesaler able to influence the consumers purchasing decision. The fifth and last force is the bargaining power of suppliers. This can act on the industry in several ways: raising prices, lowering quality or privileging some buyers. Supplier power can be divided into several elements. One of these elements is supplier concentration. Suppliers are in a stronger position when there are few suppliers, switching costs are high, the industry they are serving account for a small fraction of their business or their products are an important part of the buyers business. The bargaining power of suppliers is low or nonexistent when there are substitute products. Lastly, purchase volume and the suppliers influence on cost are very important.

Free Essays - Tuesdays With Morrie :: Tuesdays With Morrie Essays

When my parents first told me that it would be a good idea for me to read Tuesdays With Morrie, my perception of the memoir was that it was an account of an old man dying.   This did not seem, to me, to be the most interesting topic to read about.   I reluctantly began the book and soon became quite involved with the novel’s insightful progression.   I initially thought I would construct a typical review of the novel and hand it in for a good grade.   I then asked myself if I would learn anything by writing a summary.   Two answers became evident.   The first was that, of course, I would learn how to write yet another book report.   The second was that I would not benefit at all from simply summarizing the memoir.   I came to the conclusion that by focusing my paper on that which Morrie so eloquently taught the reader, both me and my teacher would gain insight and understanding about living life to it’s fullest.   Morrie’s message was, in short, not to become preoccupied with death and dying, but to live the life that you still have left in a meaningful and rewarding way.   He believed that although death would soon take him, he wanted to teach others and share his ideas so that they could be passed on to future generations.     Mitch Albom is an alumnus of Brandeis University, where Morrie Schwartz taught for many years.   Morrie left a lasting impression on Mitch and that impression is what eventually motivated Mitch to return to his wise professor.   Mitch rediscovered Morrie in the last months of the older man’s life.   Knowing he was dying, Morrie visited with Mitch every Tuesday in his study, just as they had done in college days.   Morrie taught Mitch his final lesson: how to live.   Morrie and Mitch’s relationship went far beyond that of a teacher and student.   It turned into a friendship between two men.   Morrie taught Mitch innumerable lessons about the world, feeling sorry for oneself, regrets, death, family, emotions, fear of aging, money, how love goes on, marriage, culture, forgiveness, and saying good-bye.   Morrie never wanted sympathy from Mitch; only an open mind and heart.   Morrie discussed his philosophies on life with Mitch and encouraged him to do the same.   Morrie shared his strengths and his weaknesses with his student, allowing him to open up to his old professor in a way that would help him to recharge his existing life.

The Incident

This happened to me last weekend . I am bored at that day . I was sitting outside my house alone because all of my friends were out of town . I was getting bored so I decided to ride my bike out to nearby garden . When I got there , I saw nobody over there and I started feel curious at this moment . I sit on a meadow . 1 try to make myself more relax and take a nap . Suddenly , I heard roar of thunder and the sky started become bad weather ahead . Dark , smoky clouds threatened rain , It's rain cats and dogs . I try to run back to my house . When I stood alone outside my house .I saw a stranger woman in front of me . The woman face had heavily done up . The woman body like overweight . The woman hastily asked question to me . † Dampen do you have a umbrella † When he called my name , my brain was stun a few second . Eve been beating my brains out trying to think who Is she . My brain keep dodge out a lot of question mark . â€Å"Who are you ? Am I knew you ? Why you knew my name and I never seen you before. The woman angrily red face stared at me . When she stared at me , I feel afraid at that moment . The woman said : â€Å"l am your old classmate In secondary school I I am Joey !When she said â€Å"Joey † my brain flash to secondary school the girls who absolutely beautiful in the class . â€Å"L remembered you , Joey . How are you recently ? † â€Å"I'm fine , thank you . You look handsome Dampen . What are you doing after graduated at secondary school ? † â€Å"Thank you , Joey . I am still starting my new life and continue my certificate at university . How about you ? I heard from my friends you started looking Job at outside . Why don't you continue study at university ? I heard my friends you get result with flying colors † ‘Yup , I was looking job recently .My family income pretty bad so I have to save â€Å"Joey hope you dream come true . I heard from my classmate your father was not so well . Did you b ring him to clinic ? ‘ ‘Yes , I brought my father to clinic last week . My father get diabetes and high blood pressure and he still waiting his body check report . I still worries my father. â€Å"Joey , Don't worries everything goanna be alright your father no sick anymore will as right as rain . Do you want to take lunch at cafe ? ‘†II be there later . â€Å"Okay , let's go together . When we get there , before we go in the cafe . The scene of the accidents will never roger in my mind .The motorcyclist was following behind was taxi very closely . He was so impatient that he was trying to overtake the taxi even near a sharp bend . At that moment , there was an oncoming car . The taxi driver swerved to the roadside and I got a terrible Jolt . It was too late for the motorcyclist to avoid and dodge the car . The motorcycle ran against the bumper of the car and I heard a sound like † bang ! And the motorcycle smashed its windscreen . Joey and I freaked at that moment . After that , the motorcyclist somersaulted over the car and was found lying in a pool of blood .The driver , who was cut by the flying glass , was in a state of shock . All that happened in split second and fear overwhelmed us . Joey ask me to walk quickly over there to help them. â€Å"Dampen , let's go the motorcyclist need our helped ! ‘ I yelled around people to help them . â€Å"Help ! Help ! Help! † some people ran over here and help them. The taxi driver stopped his taxi and I quickly ran to the nearest telephone to inform the police and the hospital . When I ran backed the accident I saw a pool of blood and my heart pump started increase . I saw the motorcyclist his hand was broken arm and his face like feel exhausted .

Biology IA Fitness - Free Essay Example

Sample details Pages: 3 Words: 1021 Downloads: 2 Date added: 2019/04/15 Category Sports Essay Level High school Tags: Fitness Essay Did you like this example? Analysis As my partner and I conducted this experiment, we had noticed a couple of things and learned a couple of things throughout and after the experiment. As we conducted the experiment, at first we noticed how as the days went by, the exercises were becoming easier to perform. For example, the first two weeks we would begin to sweat heavily as we performed our exercises. Don’t waste time! Our writers will create an original "Biology IA Fitness" essay for you Create order After those the first two starting weeks, we began to sweat less and it took longer each time for us to start to drop a couple of sweat drops. Also, this meant that we would get less tired as we performed each exercise. The exercises began to be easier to perform, we would get less tired each time, we began to sweat after a couple of minutes more into the exercise, and we would be more energetic each time. As we looked at our final data, we noticed the difference between our weights as we analyzed the way we began to lose weight. We noticed how the starting weeks of exercise were the most effective for us to lose weight while the mid and ending weeks of the experiment were not as effective. This analysis made us realize how starting to feel less tired, sweat less, and feel more energetic correlates to the fact that the beginning weeks of the experiment were the most effective. Together we began to lose weight the fastest and easiest around the first two-three weeks of exercise than the following weeks. We also realized how although we both weighted the exact amount of pounds, performed the same exercises, consumed the same food, and the same amounts of food, I began to lose weight faster and much more significantly than my partner Sebastian. Acknowledging the fact that I was consuming a full tea cup of black tea fifteen minutes before exercise and Sebastian was not, we came to the conc lusion that consuming black tea before exercise does help reduce weight faster than not taking any related products. Conclusion Throughout our experiment, Sebastian and I attempted to complete it as perfect as possible by creating the habit of keeping our actions constant. As we began exercising, we noticed the change of us getting tired, the amount of sweat produced, and the amount of weight loss as we progressed. Although we failed to reach our goal ,which was to lose ten pounds throughout the experiment, I was able to lose eight pounds and Sebastian was able to lose 7.35 pounds. Taking a look at our data and analyzing it, we came to the conclusion that Black Tea does help reduce weight than not taking any related product for weight loss. Throughout the experiment, Sebastian and I consumed the same amount of food per day, kept the same exercise routines, and exercised the same amount of times per day. One important thing we tried to keep constant and firm, was to keep our calorie per day goal of 1,200. We tried to consume 1,200 calories per day since we used the app named â€Å"My Fitness Pal† in order to achieve our goal. In order to keep that constant calorie consumption, we ate similar foods such as chicken, fish, lots of vegetables, fruits as snacks, and also drank lots of water. I kept consuming a full tea cup of black tea fifteen minutes before exercise, and we kept recording our weights before exercising. As mentioned before, we began to notice the change in several things such as the time we would get tired, the difficulty in our exercises, the sweat produced, and the energy we felt as we conducted the experiment. After taking a look at our data, we realized how after several days of exercise our bodies became used to the routine day after day. For that given reason, it was not surprising to see the change in our bodies by the way it reacted after two to three weeks. Regarding the change in difficulty after several days of exercise, we also realized why we felt fast change of our body’s reaction to exercise. Because Sebastian and I would play soccer back then and would always try to stay fit, it was not a difficult challenge for our bodies to adjust and get used to the exercise we conducted. After taking a look at our recorded data, we noticed the difference in each other’s weight loss as we exercised every day. Because I was taking Black Tea and Sebastian was not, we came to the conclusion that Black Tea helped me lose weight at a faster rate than Sebastian. Acknowledging the fact that we kept the amount of calories, food consumed, and the exercises as a constant for each other, it was quite understandable why I was losing weight at a faster rate than Sebastian. In total, Sebastian lost 6.35 pounds and I lost 8 pounds throughout the experiment. That data gives us enough evidence to prove that Black Tea does help reduce weight during exercise than not taking any weight loss product. Although Sebastian and I attempted to keep certain variables as constant as possible, there could have been certain limitations present during the experiment. Because we were not under high supervision, there could have been a given moment where either of us could have forgotten to record a certain food that we consumed. Keeping track of everything we consumed throughout the day was quite a challenge, maybe there could have been an easier way to keep track of what we ate at any moment. Also, another limitation that could have affected our experiment was the change of times we were able to exercise every day. As planned, sometimes we were able to exercise at 6:00 p.m. but there were times where we had to exercise around 7:00 p.m and 9:00 p.m due to the fact that there were moments in where we were both busy. Although there could have been certain limitations, it did not stop us from proving our hypothesis correct. We were able to find out that Black Tea does help reduce weight at a fa ster rate then not consuming any similar products.