Global competition impacts industry structure, the degree of competition, and a firm's competitive advantage. A firm's competitive position depends on costs, market share, price, quality, and accumulated experience. Industries can be fragmented, concentrated, or emerging. Fragmented industries have many small firms while concentrated industries are dominated by a few large firms. Emerging industries involve new technologies with challenges like lack of customer understanding and high costs.

1. Competing in the Global Market
• Global competition impacts:
– industry structure
– degree of competition
– firm’s national origin and the competitive
advantage of nations
• Competitive position
– costs, market share, price quality, accumulated
experience
• Competitive forces - Five Forces Analysis

2. Fragmented Industries
• ‘Populated by a large number of Small
Medium Enterprises’ Porter
• ‘Absence of market leaders with the power
to influence events.’
• Where:
• low barriers to entry
• transport costs are high
• local image important etc.

3. • A fragmented industry may become
consolidated with:
• technological change
• standard product preferred over customised one
• large publishing companies with small ‘imprints’
• Consolidate naturally with age
• Without consolidation a firm can specialise
and grow by:
• offering a standard product or service
• dealing with particular customers
• Concentrating on a particular area

5. Concentrated Industries
• Dominated by a small number of large
firms, exercising significant influence over
the market
• How does this happen?
• Cheap to produce in bulk
• Significant resources to stay in business
• High barriers to entry etc.

6. • Always a main market leader
• influences the way business is done
• strong relationship with sources of supply
• control over distribution networks

8. Emerging Industries
• New or reformed industry
• e.g electronic publishing and interactive TV - FT,
New York times, Digital TV.
• e.g Waste recycling - BMW, Winchester City
Council
• e.g Internet browsers - Netscape Navigator
• e.g Road pricing systems - Toll systems for bridges
and motorway

9. • Problems with emerging industries:
• lack of faith in technology
• innovative product where customer needs are as yet
unknown
• high initial start up costs
• potential customers need to be kept informed of
developments
• early barriers to entry e.g raw materials
• competition for components
• customer confusion
• Obsolescence
• Erratic quality
• Scepticism from bankers and investors

10. Which UK digital is best?

11. Waste Recycling?

12. Link in with . . .
• Kenichi Ohmae - Globalisation means
businesses do not have a nationality, but
shared values
• Levitt ‘Globalisation of Markets’
• Competitive Advantage of Nations (last
week)
• Kotler - Where do we go from here?