Econ 5315 Hw 10
Adapted Homework, Ch. 11
(11 points possible)
1. “An Analysis of sustainability is similar to a five forces analysis.” Comment on this, focusing on the firm you’ve been studying for your term project. (1 point)
A sustainability analysis is similar to a five forces analysis because they are focus on creating competitive advantage. The sustainability analysis is to analyze and find a way to compete with competitors and deal with potential entrants, in order to maintain profits in the long run. The analysis includes the company’s resources and isolating mechanism that help the company to sustain its advantages. The five forces analysis also analyze 5 factors, like supplier power, buyer power, competitors, new entrants, and
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This sets an isolating mechanism for the bank that gives the advantage to the bank with more ATM cards issued. This move set this bank with the competitive advantage to keep more clients on their side and if the relation of issuing more ATM cards translate to owning more ATM machines, then more customer would like to be in business with that bank. 2) A firm has a 60% share of T3MP, a commodity chemical used to make industrial solvents. Minimum efficient scale is thought to be 50% of current market demand. Recently, a change in environmental regulation has dramatically raised the price of a substitute chemical that indirectly competes with T3MP. This undermines the market for the substitute, which is about twice the size of the market for T3MP. In this situation, it is likely to create a sustainable competitive advantage to this firm because of a change in environmental regulation, which a substitute company cannot. The early mover in this market can keep reducing the production cost to increase or maintain more profits. It also has a chance to increase more market share that it has about 60% now.
B. In defending his company against allegation of anticompetitive practices, Bill Gates, claimed that if someone developed an operating system for personal computers that was superior to Microsoft’s Windows 95