Question

industries below high-profit industry and a low-profit industry. From what you know of the structure of your selected industry, use the five forces framework to explain why profitability has been high in one industry and low in the other.

High profit : Pharmaceuticals Low profit :Entertainment

1 Bargaining power of customers

2 Bargaining power of suppliers

3 Threat of new entrants

4 Threat of substitute products

5 competitive rivalry

Answer 1

FORCES	High probability in Industry	BECAUSE
1) Bargaining power of customers	Entertainment	Being entertainment requires skills and creative power, so no market price standard exists
		for epecific tallent and so, high margin exists in the entertainment business.
2) Bargaining power of suppliers	Entertainment	Being entertainment requires skills and creative power, so no market price standard exists
		for epecific talent and so, high margin exists in the entertainment business.
3) Threat of new entrants	Entertainment	Being low investment business and no especific registration is required. Can be started with
		no lapse of time. Highly profitable one.
4) Threat of substitute products	Pharmaceuticals	Creation of each product requires combination of same ingredients and with the defined formula,
		so each pharama company can produce each medicine, only certificate to produce required.
5) Competitive rivalry	Entertainment	Being low investment business and no especific registration is required. Can be started with
		no lapse of time. Highly profitable one. To show superiority over the other performer.