Reference no: EM132161088

In topic 2 we discussed the threat of new entrants as one of the five competitive forces impacting industry profitability. In particular we discussed an industry characterized as differentiated increasing the barrier to entry for potential new entrants. Please note: I am asking you about an industry-level effect, not a firm-level effect. In other words, I am not asking you about a company with a differentiated business model like Apple or BMW. a. How does an industry characterized as highly differentiated (in other words, the opposite of highly commoditized) serve as a barrier to entry? Besides explaining what the barrier means, conceptually explain how a potential new entrant specifically is going to be at a disadvantage. b. How do you identify/measure this disadvantage for the potential new entrant - give me two viable financial measures. Offer rationale for each measure as to why it is a direct and meaningful way of measuring the disadvantage for the potential new entrant. c. For a potential new entrant (i.e., a client who hired you for consulting advice) who faces this barrier, what is one viable option for it to consider should it still want to enter the industry, be competitive, and not accept below-normal performance? Give this client a game plan.