• In a supermarket industry that focuses on low prices, the quality of foods has been degrading in lieu of quantity and lower costs. Whole Foods is focusing on quality instead of low prices. Their customer base has high loyalty due to the lack of substitutes in the organic food
According to the authors in the passage “Status Symbol Blues,” the status symbol are things like those famously known brand like Rolex, Calvin Klein, etc. These status symbol function as the things most people desire and are well known to be expensive. With these status symbols, people usually think you have a really high prestige and a good social hierarchy. Most people now days view other people by their appearance, and without these status symbols, people usually judge you that you have a bad personal value. They ignore the fact that you have a nice education level or you have a good personality, they judge you as a bad person because you dress without the status symbol, so most people desire status symbol.
In a highly competitive firm, similar products allow buyers to find consistently low prices and a wide availability of the good that they want. Similar products also creates it to where firms are price takers because they have no control over the price set by the market. Similar
• By building economies of scale so that it can lower the fixed cost per unit. • Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Twitter, Inc. keep defining the standards regularly. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry. Bargaining Power of
Yet, there are strong entry barriers ranging from the large investment costs needed to secure the high quality inputs and technology needed for making goods in this market, the cost of branding, lack of expertise in quality management as well as relationships needed to distribute items produced. For these reasons, the threat of new entrants is significantly reduced in the luxury goods industry. Availability of substitutes The luxury goods industry has a variety of substitutes ranging from counterfeit luxury goods items to accessories available on the mass fashion market. These substitutes, however, are selected on their basis of attractiveness and price yet “knock off” products are selected in the case where those in their social circles do not readily identify them as counterfeit since prestige is what the luxury goods market thrives on. The availability of substitutes is thus a moderate force since reputation is a major reason for individuals purchasing luxury
Had he gone further into the report he would have found that organic fruits and vegetables are significantly closer in price to conventionally grown ones. We are all paying extra for the fallout from GMOs. This case indeed shows that food labeling issues are not only vital and extremely important today, but also that there is very hard to come to a solution. It would be very easy to label everything, require companies to let consumers know every single ingredient and in turn, hope to increase global health levels. However, it seems that opposing side has very strong arguments and companies are reluctant to sacrifice their profits in order to improve consumers health, which, very interestingly, is sometimes argued would not be achieved by doing so
Thus no single customer carries enough weight to significantly affect the market pricing of Starbucks. However, Starbucks must be sensitive as to how much of a premium their customers are willing to fork out before their customers decides to boycott Starbucks for much cheeper alternatives. (Investopedia. 2015, December 08) Bargaining power of suppliers: Low There’s more than enough suppliers for Starbucks to choose from with relatively low switching cost. Starbucks is a major customer for most suppliers, which in turn lessens the bargaining power of the suppliers.
Fifth, the changing economy may leave consumers with less disposable income, which will result in a decline in the sales of Jamba Juice. Overall: Jamba Juice’s strong brand and competencies in creating quality products make opportunities for expansion (i.e. diversification, horizontal integration) very attractive. However, their inability to keep costs down and their lack of quality marketing make the threats of price wars or increased product substitution increasingly
The rivalry associated with ALDI 's industry is considered to be high because their market share is so low. ALDI is a German Grocery company competing against large Americanized grocery chains with an even larger customer base, supermarkets, and masses of local food distributors. ALDI 's competitors have also struggled with keeping up the extremely low everyday prices that ALDI offers. ALDI 's Chief Executive, Matthew Barnes, was even quoted pledging that ALDI would never be beaten on price. Although their prices set them apart, they struggle with keeping up with the innovations proposed by other companies, such as online delivery.
Hence, when it announces the acquisition, firm value may drop simply because investors conclude that the market is no longer growing. The acquisition in this case does not destroy value; it just signals the stagnant state of the market. Why do sellers earn higher return? Buying firms are typically larger than selling firms. In many mergers there are so much larger that even substantial net benefits would not show up clearly in the buyer’s share price.