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The behaviour of organisations and the market environment - Essay Example

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The competitive environment of the company is understood by evaluation the five forces acting on the business process of the firm. These five forces if not evaluate by the company can affect the company’s performance in the industry. In order to evaluate the different forces of the business environment Porter’s five forces is a very essential tool for the companies. …
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The behaviour of organisations and the market environment
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Download file to see previous pages Sony being one of the leaders in the music, movies, gaming and electronic industry is competing with many players in the electronic market. Several players like Samsung, hp, LG are already in a steady position in the market with around same market share. The industry of electronics grew at a very fast pace over the year and with the emergence of many new companies from South Korea like Samsung and LG many existing players of the market like Sony are suffering to maintain their market share. Samsung maintained a huge profit of $3 billion profit while Sony suffered in earning during the same period (LedTV, 2011). To maintain the market share the company need to develop a strong base to compete with the global market (Market Research News, 2011). Though these players are entering into the market but threats from new entrants are relatively low in electronics industry as compared to other industry. The capital requirement for the entry is huge for the new players which is not possible for many to enter the market. The switching cost of the new entrants is also high in electronic industry. For new players it’s difficult for them to know the new technologies and invest in research and development process. The diversified product line from the existing players like Sony is a great advantage for them. Economies of scale are another issue which keeps the competition low from the new players. Define the meaning of perfect competition. To what extent does your chosen industry’s structure fit with your definition? In a perfect competition scenario all the players of the market are approximately equally sharing the market share. None of the companies in the market are large enough to set the price for the industry. Most of the firms in the same industry produce same kind of products and follow the expected price for the product which other players are using. In a perfect competition market no single company leads the race for the industry. Everyone in the market possesses same kind of small market share. The customers in a perfect competition market are aware of the products from all the players and they have an expected price of the different products from the companies the new entrants can enter with ease in this market situation and they also don’ ...Download file to see next pagesRead More
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