Based on your analysis of the ease of entry into and the threat of substitute products and services in the pizza segment of the restaurant industry, your friends have now asked you to estimate the threat of retaliation by incumbent rivals in the industry. Explain your assessment of this threat.
What will be an ideal response?
The expected reaction of industry incumbents in defending against new entry is an important factor affecting the threat of entry. Retaliation threats are derived from the ability and willingness of industry incumbents to launch strong defensive maneuvers to maintain their positions and make it harder for a newcomer to compete successfully and profitably. Entry candidates may have second thoughts about attempting entry if they conclude that existing firms will mount well-funded campaigns to hamper (or even defeat) a newcomer's attempt to gain a market foothold big enough to compete successfully. Such campaigns can include any of the competitive weapons listed in Table 3.2, such as ramping up advertising expenditures, offering special price discounts to the very customers a newcomer is seeking to attract, or adding attractive new product features (to match or beat the newcomer's product offering). Such actions can raise a newcomer's cost of entry along with the risk of failing, making the prospect of entry less appealing. The result is that even the expectation on the part of new entrants that industry incumbents will contest a newcomer's entry may be enough to dissuade entry candidates from going forward.
However, there are occasions when industry incumbents have nothing in their competitive arsenal that is formidable enough to either discourage entry or put obstacles in a newcomer's path that will defeat its strategic efforts to become a viable competitor. In the restaurant industry, for example, existing restaurants in a given geographic market have few actions they can take to discourage a new restaurant from opening or to block it from attracting enough patrons to be profitable.
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Which of the following is a disadvantage of the departmental overhead rate method?
A. The departmental overhead rate is consistent with GAAP and can be used for external reporting. B. The departmental overhead rate is usually more accurate in overhead allocations than the plantwide overhead rate. C. Allows each department to have its own overhead rate. D. Allows each department to have its own allocation base. E. It may fail to accurately assign many overhead costs that are not driven by production volume.
According to Karen Dillon, author of the HBR Guide to Office Politics, we have a tendency to surround themselves by people who ______.
A. think like we do B. think differently than we do C. are both similar to and different from us D. have different value structures than we have
What is logistics?
A. The purchasing of goods and services to meet the needs of the supply chain. B. Occurs when distorted product-demand information ripples from one partner to the next throughout the supply chain. C. Includes the processes that control the distribution, maintenance, and replacement of materials and personnel to support the supply chain. D. Includes activities that govern the flow of tangible, physical materials through the supply chain such as shipping, transport, distribution, and warehousing.
Roy is building his personal brand, so he should
A) list his most important needs for development. B) compare himself to his favorite brands, such as Nike or Chevrolet. C) give himself a clever name, such as "Resilient Roy." D) think through his basket of strengths.