This is an Application Exercise This is the company’s website that you use for the explanation https://mechanicalheating.com/about-us/ The template to be used is attached below The second file is an e

This is an Application Exercise This is the company’s website that you use for the explanation https://mechanicalheating.com/about-us/ The template to be used is attached below The second file is an e
Student Name: THREAT OF NEW ENTRANTS Company Name: THREAT OF SUBSTITUTES SUPPLIER BARGAINING POWER BUYER BARGAINING POWER COMPETITIVE RIVALRY Industry: HOW TO USE THIS TEMPLATE: Use each section below to go into detail about each of the 5 forces as it relates to the industry of your focal company. Use the template above to summarize the most important facts and figures from your detailed description below. Think of the template above as an executive summary. The most salient facts should be included in bullet point format. The reader can reference the details below for supporting explanation. IMPORTANT: This is not an exercise in “unsubstantiated assumptions” …each point should be supported by data and referenced. Mastery of these concepts comes from figuring out how to hunt down industry and competitor data and use it to make an “educated assumption”. COMPETITIVE RIVALRY: Describe the nature of rivalry within your focal industry (competitive landscape). This section should include all (or at least most) of the seven factors are, explain using the following: (The Number and Size of The Competitors, Standardizations of Products, Costs to Buyers of Switching to Another Product, Growth in Demand for Products, Levels of Unused Production Capacity, High Fixed Costs & Highly Perishable Products and The Difficulty for Firms of Leaving the Industry). BUYER BARGAINING POWER: Describe the number/concentration/size of buyers. Is there a credible threat for backward integration? How sensitive are buyers to price changes (Drivers of Price Sensitivity are: Explain using the following: Buyers are Struggling Financially, Products is Significant Proportion of Buyers Costs, Buyers Purchase in Large Volumes, Products does not Affect Buyers’ Performance very much and Products does not Save Buyers Money). SUPPLIER BARGAINING POWER: Describe the number/concentration/size of suppliers. Is there a credible threat for forward integration? THREAT OF NEW ENTRANTS: Describe the barriers to entry that exist in the industry including economies of scale, experience, or learning that may exist. Are there other cost advantages enjoyed by the incumbents that are not related to scale? What are the capital requirements to enter the industry? Do network effects impact this industry? Does government policy and restrictions impact the industry? Remember, these are barriers…and if they are high…then the threat of entry is low, and vice versa. THREAT OF SUBSTITUTES: Describe substitute products that may be indirectly competing within the industry and drawing away customers. Describe the awareness and availability of these substitutes as it compares to the core products in the industry. Is price and performance of the substitute competitive and/or sustainable? GENERAL ENVIRONMENT: Are there any noteworthy impacts from the general environment shaping firm and industry profitability wither now or on the horizon. Explain using the following: (Complimentary products/Services, Technology Change, General Economic Conditions, Demographics, Ecological/Natural Environment, Global Forces, Political/Legal/Regulatory Forces and Social/Cultural Forces). CONCLUSION: Through thorough analysis of the 5 forces, you should arrive at a general conclusion as to the nature of rivalry within the focal industry. If rivalry is generally high, then profits are usually lower, making the industry less attractive. The opposite is true if rivalry is low. This does not necessarily mean that your focal company cannot or should not enter the market, however, it will greatly impact their strategy. For example: low rivalry (high profit industries) typically enjoys superior returns, but the barriers to entry are usually quite high, which would have major implications on a strategy for entering the market. Also, as an example, lower profit industries may be easier to enter, however, a strategy of rapid innovation may be required to stay ahead of the pack and stay profitable. This section should include your overall understanding of the industry competitiveness and attractiveness, as well as how your focal company may use this information to position itself for a sustainable future in the industry. Include all references is APA style.
This is an Application Exercise This is the company’s website that you use for the explanation https://mechanicalheating.com/about-us/ The template to be used is attached below The second file is an e
THREAT OF NEW ENTRANTS Need substantial capital and resource investment New vets wanting their own office Company Name: MiVet Animal Clinic THREAT OF SUBSTITUTES Cheaper products/overall bill Better quality elsewhere Faster workplace SUPPLIER BARGAINING POWER Compete in competitive market Technology and medicine changes and need to keep it up-to-date BUYER BARGAINING POWER Little to, no power Can try to switch suppliers to the cheapest but this takes too much time Find best fit for the company and stick with them COMPETITIVE RIVALRY Very high Increasing numbers of household pets Low switching costs Growth in demand of products Industry: Veterinary Services COMPETITIVE RIVALRY: The competition rivalry in the veterinary service industry is very high. I found that demand for veterinary services has remained very strong over the last 5 years which can be due to increasing pet ownership and advancing technology. With more advances in veterinary medicine it has lengthened the lifespan of many companion animals. Data from the American Pet Products Association states that 67.0% of US households, or 84.9 million homes, have at least one pet, providing steady demand for routine veterinary services. Veterinary service industry sees the increase in these numbers and knows that it is creating new potential customers each and everyday and they must think of ways and techniques to continue to grow. This creates basically no switching costs to buyers and owners of pets. Firms can close at any time and this affects consumers in the way that now they will have to find a new vet for their loved pet. The products will be generally the same as each service will be around the same unless it is a special surgery or dealing with an exotic pet. The growth in demand for products just depends on the consumers. As is stated, many of homes have at least one pet and the number has been increasing over the past 5 years so the demand for products can only be increasing too. BUYER BARGAINING POWER: Buyers hold little to no power in the veterinary service industry. Offices can search for cheaper suppliers but the industry works as finding a salesman that they repeatedly order from. The last of a veterinarian office worries should be finding the cheapest price week in and week out to order products from. As stated below, the offices main use a “copy and paste” system where they give supplier/salesman an order form each week that has many of the same tools and instruments as the previous weeks. I found that the product differentiation within the industry is high, which means that the buyers are not able to find alternative firms producing a particular product which creates difficulty in switching. With veterinary offices working in the medical field they want the best up-to-date quality products. Buyers want the lowest price but they making so many frequent purchases they are less price sensitive. This makes the bargaining power of buyers a weaker force within the industry. There is no significant threat to the buyers to integrate backwards. SUPPLIER BARGAINING POWER: Pharmaceutical companies are in a highly competitive market so this will drive the bargaining power down and is better for the veterinary service industry. This being medical supplies the corporations for bonds with suppliers and rarely change them. They may have different suppliers for different items but it is a “copy and paste” inventory system for veterinarian offices. I found a that it was compared to personal bank accounts. People find the best option when they search for a bank and rarely change despite numerous options out there. All of this being said, the suppliers still hold power and can raise or lower prices in needed. By doing this they could risk the company finding a new supplier so this is why many sign contracts or have very close relations and keep things straight up. With the veterinary service industry being in the medical field and dealing with advances in technology, the bargaining power of the supplier diminishes even further. With basic products being readily available in every supplier hands, this is important that each supplier treats the office purchasing materials with mutual respect and be honest. No forward integration. THREAT OF NEW ENTRANTS: The major barrier to entry in the veterinary service industry would be getting veterinarians so you can open an office. It is also a very expensive to open and needs a lot of resources to open a veterinary office. On average it takes 8 years of school for someone to become a veterinarian which is a long time and process. Along with that comes on average anywhere between $28,000 and $54,000 a year for schooling so students will be in major debt graduating school. This will make it a hard process for them to go out and get a bigger loan to open up a veterinary office rather than go and work for an already established office. A new office can be a hard thing to run and gain new customers compared to an established office. In my research I came across that practices with one of the corporate business models have grown 36% in the last three years whereas independent practice numbers have grown at 9% in the same period. This is such a big growth difference and has to be something that pushes people away from entering the veterinary service industry. I also found out that current economic environment means that access to capital to fund new businesses has favored corporate entrants. THREAT OF SUBSTITUTES: Substitutes for the veterinary service industry is a very vague term because it could just be any other office. People will do research to find the best veterinary service located around them and continue to go there until they would rather pay a cheaper price or move away. In my research I found that there was much discussion about what could actually be substituted in this industry other than the office itself. I found that a vet’s job could be split into two distinct areas: clinical work, which vets were trained in and, for some areas such as acute medical or surgical procedures, no-one could substitute; and all of the non-clinical aspects, which were highly susceptible for substitution. However, it was possible that some clinical services, such as preventive medicine, could be offered by substitutes. Think about it like your bank or dentist office, these are places that once you have one you pretty much stick with it until something major changes. There will always be new veterinarians graduating every year and offices everywhere it is just how each office and make themselves out compared to the others. GENERAL ENVIRONMENT: Technology and advancements hold a big impact on the shaping of offices and can make one more profitable than the next if they have up-to-date equipment. Having the best machines and tools is the best thing to get the job done and get it done the right way. It can put a very big cost for the company but create positive and profitable outcomes. Economic conditions have an outside force that could affect the market and conditions for industries. If the economy is down and people don’t have extra funds then they will not take on the extra price burden of purchasing a pet which will drive profits down. CONCLUSION: In conclusion this is not a great market to enter and hold little to no potential. The competition is very high and the threats outweigh the opportunities in almost every single category. The suppliers hold power but can be dropped for a different supplier buy the company so each have to be treated with mutual respect. The buyers hold power because they can switch companies at no cost so it is on the firm to retain customers. With the rise of household pets veterinary service industries will not be going anywhere in the foreseeable future and continue to be a profitable organization. Sources http://fernfortuniversity.com/term-papers/porter5/asx/732-national-veterinary-care-ltd.php https://veterinary-practice.com/article/how-strong-is-the-threat-of-new-entrants https://www.ibisworld.com/united-states/market-research-reports/veterinary-services-industry/ https://veterinaryrecord.bmj.com/content/174/Suppl_1/6 https://veterinaryrecord.bmj.com/content/174/Suppl_1/5