Discussions in economics

Running head: WEEK 4 DISCUSSION 1

WEEK 4 DISCUSSION 4

Dwayne Ward 

RE: Week 4 Discussion

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Good evening everyone,

The Porter’s Five Forces are used to analyze the competitive environment within an industry and profits are being affected within the industry. The five forces focus on the intensity of competitive rivalry, threat of new competitors’ entry, utility of alternative solutions, bargaining powers of suppliers, and the bargaining powers of customers. I am going to use the wireless telecommunications industry in my discussion. This industry consists of companies that engaged in providing wireless communication services such as with cell phones and other telecommunication services.

•Ease of entry into the telecom industry has gotten less difficult to get into, but still requires the purchase of very expensive technologies and bandwidth to be able to provide a desirable service to customers.

•There are many companies in the telecom industry, the market is primarily dominated by a few well-established companies with larger resources available to them such as Verizon, AT&T, and T-Mobile. Many of the smaller wireless carriers have been acquired by the larger, more established ones for example, Boost Mobile is owned by T-Mobile now. When considering the industry activities, the biggest standout is the necessity of promotions and price matching amongst wireless carriers.

•More likely the top players in this industry will continue to improve their existing products and services by continuing to reinvent the same products and services repeatedly. More companies are using 5G now would be an example.

•The bargaining power of the industry suppliers would be moderate to low. Reasoning being is because the suppliers depend on what the telecom companies are supplying for them a reason for their devices to exist.

•The consumer bargaining power would be low, as the product/service is often considered essential, and there is not much variation among price or quality for the primary industry leaders.

 

Zwilling, M. (2012). A Stronger Economy Means More Competitive Threats. Retrieved on October 27, 2020,  https://www.forbes.com/sites/martinzwilling/2012/04/24/a-stronger-economy-means-more-competitive-threats/#570daca17df9

Froeb, Luke. 2018. Managerial Economics: A Problem-Solving Approach (5th ed.). p. 59. Cengage

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Valecia Young 

RE: Week 4 Discussion

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According to Porter's  Theory, the best industries embody these key performance indicators:1) low buying power,2) low supplier power, 3)low threat of entry, 4)low threat of substitution,  and 5) low levels of rivalry between firms (Froeb,McCann,Shor,& Ward, 2017). These characteristics set a business up  to operate as a monopolistic oligarchy where it remains dominate as an industry leader and sets market share based  on its branding and reputation. Also,the  level of  service offered in its differentiation of services.  Hotel groups such as Hilton, Marriott Bonvoy, and InterContintental Hotel Group embodies this model. While many hotel/lodging facilities exist, the most reputable fall under these 3 buying groups.The level of service based on the amenities that each hotel chain offers affects the pricing that they offer and is identified through the star system(Diamond, 5  Star, 4 Star, 3 Star and etc.). These attributes are also embodied through product differentiation and marketing. For example, " businesses use unique, eye-catching packaging that differs from that of other brands to keep consumers drawn for aesthetics and embedded into their memory. It makes the product/business easily identifiable.  This is also demonstrated by the business' use of human capital: the unique value of a brand based on the employees’ skills, their degree of training, and even the look of their uniforms. Essentially,just by branding one can tell Marriott afiliated hotel  from a Hilton or InterContinental and will use that to justify frequenting them to book lodging and paying a certain market rate as a result.

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.Ward, L.M.F.B.T.M.M. R. (2017). Managerial Economics. [Strayer University Bookshelf]. Retrieved from https://strayer.vitalsource.com/#/books/9781337468015/

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