Question

Develop a paper on Contending Forces and Contestable Markets for General Motors and Dell technologies. Refer the following paragraph for further details.

Briefly explain contending forces with the help of the definition and prepare a detailed paragraph based on the below hints.

Contending forces consist of (1) threat of entry, economies of scale, product differentiation, capital requirements, cost advantages and disadvantages, access to distribution channels, and government policies, (2) vertical and horizontal linkages of suppliers, (3) understanding consumers and buyers along with substitute and complement products. Linking these concepts in your discussion allows you to understand the contestability of the market structures.

Assessing competitive positions improves a firm's chances of designing strategies that optimize its environmental opportunities. The following criteria are often included: market share, breadth of product line, effectiveness of sales distribution, proprietary technologies and patent rights, price competitiveness, advertising and promotion effectiveness, location and age of facility, capacity potential/limitations and productivity, and the quality of the workforce.

Answer 1

Answer

contending forces

The contending forces are the strongest competitive forces which ientify and determine the industry profitability and it is of greatest importance in the formulation of strategies.It generally consist of

threat of entry like even a company which hold a strong position in an industry is under threatened by the entrant who have potential will earn low return if it confronts a lower cost subsititue product or a superior .In this situation merely duplicating or coping the product substitute is the no. strategic priority .This also includes the advantages an disadvantages of cost which will affect the business . Further the industry (any ) has anunderlying structure or we could day a set of technical characteristic and fundamental economic which gives rise to contending forces .This help in making the business to have strongest position in the industry .

The economies of scale in production , technology , marketing and service are the key resitance to the entry in mainframe inustry .The economies of scale act as a barrier in the utilization of sales forces , distribution , and financing or other part etc .

Capital requirement - There is a barrier to entry if there is aneed to invest lot of financial resources for competing specificaly if the capital is needed for unrecoverable expense like in advertising or in Research and development .

Cost disadvantages Those companies which are entrneched have cost advantages which is not availbe to thier competitors and is irrespective of the size and ecomies of scale.

Access to the distribution channels - If the wholesale or retail channel are more limited then the existing competitors have more tougher entry in to the industry

Government policy - The govt. can restrict the entry to industries with policy like license requirement and can also restrict raw material .

Powerful supplirs and buyers - Each important supplier or buyer group have important power which depends on the no. of characteristis of the situation of market and the importance (relative ) of the sales and purchase to the industries which is compared with the overall business .

Contenstability

According to the theory of market contestability , when the technological access is equal and the entry barrier is weak or low there is a contant threat which exist that new competotors can enter the market Assessing competitive positions improves a firm's chances of designing strategies that optimize its environmental opportunities. The following criteria are often included: market share, breadth of product line, effectiveness of sales distribution, proprietary technologies and patent rights, price competitiveness, advertising and promotion effectiveness, location and age of facility, capacity potential/limitations and productivity, and the quality of the workforce.

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