If industry returns are at-tractive and are expected to remain so, and if capital marketsare efficient, investors will provide entrants with the fundsthey need
yes this makes sense - if they are expected to remain attractive, investors will more lenient with providing entrants the funds they will need
Understanding the competitive forces, and their under-lying causes, reveals the roots of an industry’s current profit-ability while providing a framework for anticipating andinfluencing competition (and profitability) over tim
competitive forces > reveal roots of industry's current profitability while providing framework for anticipating and influencing competition (and profitability) over time!
entry by limiting the willingness of customers to buy from anewcomer
basically demand side - willing to buy from old established, not willing to buy from new. old and established works, new does not work.
Supply-side scale economies deter entry byforcing the aspiring entrant either to come into the industryon a large scale, which requires dislodging entrenched com-petitors, or to accept a cost disadvantage
so supply side scale economies is basically because larger volume = lower cost as it is spread over more units, and they in turn, usually have more money for technology + supplier terms (because they are using so much of it). therefore, you have to come in big or accept not really being too successful or as succesful
It is the threat of entry, not whetherentry actually occurs, that holds down profitability
interesting - that it's the threat of entry and not whether it actually occurs, that holds down profitability.
New entrants to an industry bringnew capacity and a desire to gain market share that putspressure on prices, costs, and the rate of investment nec-essary to compete
yes very true! the new entrants - bring capacity and desire to gain market share that puts pressure everywhere!
while the threat of entry, the threat of substi-tutes, and the power of suppliers are more benign
yeah because how would they be able to do these things?
Yet competition for profits goes beyond es-tablished industry rivals to include four othercompetitive forces as well: customers, suppliers,potential entrants, and substitute products
the five forces is essentially the concept that one: industry established rivals, customers, suppliers, potential entrants (who might be joining the market, aka in the ai industry everyone lol), and substitute products.