For this week’s discussion, the focus will be on examining Porter’s Five Forces as a tool for looking at the pressure on profits. Specifically, how does Porter’s analysis examine the stress on profits from all directions and all dimensions of a firm’s environment? You will be applying this tool by specifically looking at the market structure in which a firm completes. You will need to be able to distinguish an oligopoly from a monopolistic competitive market structure.
There are two groups of firms below.
- Group 1: firms in the retail sector (e.g. Amazon; Wal-Mart; Target; Kohl’s; Sears; Macy’s)
- Group 2: firms in the wireless services industry (e.g. Verizon; AT & T; Sprint/T-Mobile) (this about telecommunication services, not about the sale of phones)
For each group determine and explain if the group is monopolistic competitive or an oligopoly. You need to specific for both in which market structure the firms operate.
Then choose one of the firms from one group. Using a Porter’s analysis what are the threat to profitability? This would be a great time to expand your research skills by checking out the firm’s investor relations page. Use the Research Hub. Go to the ECO550 Library landing page and if you need help, Ask the Librarian to help you find the investor relations page.