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Dynamic Communication dominates a segment of the consumer electronics industry. A small competitor
in that segment is Wade Goods & Co. Wade has just introduced a new product, the Carrycom, which will
replace the existing Wade product line and could significantly affect the industry segment.
Mike Brandreth is preparing an industry research update that focuses on Wade, including an analysis that
makes extensive use of the five competitive forces identified by Porter. As part of his research, Brandreth
attends the launch presentation of the Carrycom. Wade’s President, Toby White, makes the following
statements:
“Wade has an exclusive three-year production license for Carrycom technology from the patent
owners of the new technology. This will provide us a window of opportunity to establish a
leading position with this new product before competitors enter the market with similar
products.”
“A vital component in all existing competitive products is pari-copper, an enriched form of
copper; production of pari-copper is limited and is effectively controlled by Dynamic. The
Carrycom is manufactured with ordinary copper, thus overcoming the existing dependence on
pari-copper. All other Carrycom components can be purchased from numerous sources.”
“Existing products based on pari-copper are designed to work in a single geographic region that is
pre-determined during the manufacturing process. The Carrycom will be the only product on the
market that can be reset by the user for use in different regions. We expect other products within
our industry segment to incorporate this functionality at the end of our exclusive license period.”
“The Carrycom and similar competitive products have recently added the function of automatic
language conversion. This elevates these products to a superior position within the broader
electronics market, ahead of personal digital assistants, personal computers, and other consumer
electronics. We expect that the broader electronics market will not be able to integrate automatic
language conversion for at least one year.”
“We intend to replace Dynamic as the market leader within the next three years. We expect
ordinary copper-based products with automatic language conversion to be the industry standard
in three years. This will result in a number of similar products and limited pricing power after the
three-year license expires.”
Brandreth has adequately researched two of Porter’s competitive forces—the bargaining power of buyers
and the bargaining power of suppliers—and now turns his attention to the remaining competitive forces
needed to complete his analysis of Wade.
2. Determine, with respect to each of the remaining competitive forces, whether Wade’s
position in the industry is likely to be strong or weak:
A 5 años, aunque con una gran disminución, Wade podría mostrarse en una posición
débil dentro de la industria, ya que habría perdido la ventaja en al menos 4 de las 5
fuerzas de Porter. Con la expiración de exclusividad de la patente, se crean nuevos
competidores, los ya existentes compiten con mas fuerzas, se hacen muchos productos
sustitutos, lo que a su vez aumenta el poder de los clientes. En este caso uno de los
aspectos positivos es que igualmente los proveedores siguen siendo muchos, por lo que
estos no ganan mucho poder.