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a ‘Strategic Management: Theory & Cases: An Integrated Approach Ses 2! exercises
‘Chapter 2, End of Chapter, DISCUSSION QUESTIONS, Exercise 3
Pata path [Povo | Parte
Identify a growth industry, a mature industry, and a declining industry. For each industry, identity the following:
(c) the height of barriers to entry,
What do these factors tell you about the nature of competition in each industry? What are the implications for
the company in terms of opportunities and threats?
Explanation
The barriers to entry may be high or low If the barriers high, then there are factors inthe industry that will make It ficult for new
businesses to enter. If the barriers low, then new businesses can easily enter the industry and join the competition.
‘Sample Response &
‘The table below summarizes the industries with their corresponding stages inthe industry Ife cycle and height of barriers to
entry:
Industry Industry Ife eyele stage | Height of barriers to entry
Viceocontorencing Software Growth Moderate
Oi Drling and Gas Extraction Mature High
Newspaper Publishing Dectning Low
+ Videoconterencing software industry - the height of barriers to entry can be considered to be moderate since the nature of
the barriers is available inthe market, Intensive research and development can ether be outsourced externally or created
internally inthe organization, while technical competencies can easily be obtained from the labor market or through a tie-up
with educational institutions
+ Olldiing and gas extraction industry - the height of barriers to entry can be considered to be high because the industry is
capita intensive and requires an extensive oll and gas transport network. Without the necessary capital the setting up of oll
rigs and the acquisition of gas extraction equipment are not possible.
+ Newspaper publishing industry - the height of barriers to entry can be considered to be low because logistical support and
storage and warehouse facilities are common in most industries and may easily be obtained from service providers.
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Textbook Solutions / Stategle Management Theory & Cases An Integrated Aoproach /Ch2.End ot Chapter Bx0 Bae
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