3-6 Task Environment o Competitors. other organizations that produce similar goods Rivalry between competitors is usually the most serious force facing managers High levels of rivalry often means lower prices e Profits become hard to find Barriers to entry keep new competitors out and result from o Economies of scale: cost advantages due to large scale production o Brand loyalty: customers prefer a given product " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 3-6 Task Environment ⚫Competitors: other organizations that produce similar goods. ◼ Rivalry between competitorsis usually the most serious force facing managers. ◼ High levels of rivalry often means lower prices. ◆ Profits become hard to find. ◼ Barriers to entry keep new competitors out and result from: ◆ Economies of scale: cost advantages due to large scale production. ◆ Brand loyalty: customers prefer a given product
3-7 Industry Life Cycle Reflects the changes that take place in an industry over time. o Birth stage: firms seek to develop a winning technology. VhS vS. Betamax in video or 8-track vs cassette in audio e Growth stage: Product gains customer acceptance and grows rapidly. New firms enter industry, production improves distributors emerge " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 3-7 Industry Life Cycle ⚫Reflects the changes that take place in an industry over time. ⚫Birth stage: firms seek to develop a winning technology. ◼ VHS vs. Betamax in video, or 8-track vs. cassette in audio. ⚫Growth stage: Product gains customer acceptance and grows rapidly. ◼ New firms enter industry, production improves, distributors emerge