Phát triển chiến lược kinh doanh dịch vụ chuyển phát tại công ty cổ phần viettel post VTP

LUẬN VĂN THẠC SĨ

Phát triển chiến lược kinh doanh dịch
vụ chuyể phát tại công ty cổ phần
Viettel post VTP

THESIS MBA

DEVELOPMENT BUSINESS STRATEGY
IN LOGISTIC SERVICES FOR VIETTEL
POST JOINT STOCK COMPANY (VTP)
FROM 2015 TO 2020

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COMMITMENT STATEMENT
We commit that this capstone is our group works. All our data are true and
verifiable. Our capstone was composed for study and research only. All public data
we collected from Viettel Post Joint Stock Company (VTP) only for research
purposes and we don’t make any commitment and statement about VTP.
ACKNOWLEDGEMENT
Firstly, we want to send sincere thanks to VNU for their organization of this
excellent training course .We also would like to express our gratitude to all
teachers in this training course for all what they have been doing for us. We also
would like to VTP for their guidance and their helps us during times we composed
this capstone.
Last but not least, we also don’t forget to send special thanks to assessment board
for their invaluable comments and helps, so we can fulfill well this capstone.
However, our capstone was composed in a shortage of times, so we think it is still
some constraints. We look forward to hearings from you more comments and

contributions.
With best regards,

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TABLE OF CONTENTS
CONTENTS
ABBREVIATION LIST
TABLES LIST
INTRODUCTION
I.
II.
III.
IV.
V.

PREFACE
OBJECTIVES AND APPLICATION OF CAPSTONE PROJECT
SCOPE OF RESEARCH
RESEARCH METHOD
STRUCTURE

CHAPTER I – THEORITICAL BACKGROUND

PAPE
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1.1 Concepts about strategy and strategy management
1.1.1 Strategy definition
1.1.2 Typical features of business strategy
1.1.3 Role of strategy
1.1.4 Level of Business strategy
1.1.5 Strategic management
1.1.5.1 Strategic management definition
1.1.5.2 Strategic management benefits
1.1.5.3 Strategic management tasks
1.1.5.4 Process of Strategic management
1.1.5.5 Selection of strategies
1.1.5.6 Techniques of scanning
1.2 Logisitic
1.2.1 Logistic definition
1.2.2 Logisitic classification
CHAPTER 2: BUSINESS STRATEGY IN LOGISTIC SERVICES
OF VTP FROM 2006 TO 2009

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2.1 About VTP

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2.1.1 Company profile
2.1.2. History and Development of VTP
2.1.3 Organization and management structure
2.1.4 Vision
2.1.5 Mission
2.1.6 Objectives and business strategic orientation in logistic services

2.1.6.1 General objectives
2.1.6.2 Specific Objectives
2.1.6.3 Business strategic orientation

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2.1.7 Business strategy of VTP in logistic services from 2006 – 2009
2.2 Development business strategy analysis
2.2.1 External environmental analysis
2.2.1.1 Macro environment
2.2.1.2 Industry Environment Analysis
2.2.1.3 Porter’s five forces analysis of competition
2.2.2 Internal environment analysis
2.2.2.1 Achievement of VTP in 2006 – 2008
2.2.2.2 Market share in Express delivery services
2.2.2.3 Services networks
2.2.2.4 Logistic systems
2.2.2.5 Human resources
2.2.2.6 Marketing
2.2.2.7 Core competencies
2.2.2.8 Key success factors
2.2.2.9 Evaluation strength and weakness of VTP in logistic services
CHAPTER III. DEVELOPMENT STRATEGY IN LOGISTIC
SERVICE IN THE PERIOD OF 2010 – 2015

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3.1 Diversification strategy of VTP from 2010 to 2015

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3.1.1 SWOT analysis
3.1.2 Selection of strategy
3.1.3 Competitive strategy
3.1.4 Marketing
3.1.5 Distribution channel
3.1.6 Logistic infrastructure
3.1.7 Financial forecast
3.1.8 Human resource
3.1.9 Operation management
3.1.10 Implementation plan
3.2 Recommendations and Solution
3.2.1 Marketing solution
3.2.2 Service quality solutions
3.2 3 Services networks solution
3.2.4 Organization solutions
3.2.4.1 Restructure organization model
3.2.4.1 Human resources solution
3.2.5 Logistic system
3.2.6 Application information technology in management
3.2.7 Finance management solution

CONCLUSION
REFERENCES

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ABBREVIATION LIST
- VTP

: Viettel Post Joint Stock Company

- VIFFAS

: Vietnam Freight Forwarding Association

- GDP

: Gross Domestic Product

- 1 PL

: First Party logistic

- 2 PL

: Second Party logistic

- 3 PL

: Third party logistic

- VND

: Vietnam dong

- MPI

: Ministry of Foreign Investment

- USD

: United State Dollar

- GPS

: Global Positioning system

- ICD

: Inland container depot

- WTO

: World Trade Organization

- JSC

: Joint Stock Company

- PR

: Public Relationship

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- ISO

: International Standard Organization

- TQM

: Total quality management

TABLES LIST
Table .1
Table 1.2
Table 1.3
Table 1.4
Table 1.5
Table 2.1
Table 2.2
Table 2.3
Table 2.4
Table 2.5
Table 2.6
Table 2.7
Table 2.8
Table 2.9
Table 2.10

Table 2.11
Table 2.12
Table 2.13
Table 3.1
Table 3.2
Table 3.3
Table 3.4
Table 3.5
Table 3.6
Table 3.7

Strategic Management Steps
The process of strategic management
Porter five force
SWOT analysis
Logistic classification
Organization structure of VTP
Market share of 3L in 2015
Logistic industry
Comparison Table between revenue/GDP
General Logistic Market
Outsource Logistic
Classified market shares with mode of company
Classified market shares with type of services
Classified market shared by Vietnamese and foreign
company
Market Share
Financial statement of VTP in 2009
Market share of express delivery services of VTP
Services net work of VTP from 2006-2008

Price statement
Mode of distribution channel of VTP logistic in future
Warehouse investment plan
Forecast revenue from 2010 to 2015 and 2020
Operation plan
Market shares of consumer goods
Organization model

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INTRODUCTION
I. PREFACE

Along with the development of society, logistic services play very important role in
development of economy in the country. It participates in all production process
from raw materials until the goods are delivered to hand of consumers.

It is

considered as a blood vessel to nurture the economy in every country. Efficiency of
logistic services is decisive factors to create competitive advantages of each
country. As logistic performance index statistic, Vietnam ranked 53rd in the world
and 05th in the ASEAN region. Logistic market is considered as a potential market
for investment: the total revenue of this logistic service sector accounts for a large
proportion of the total GDP of countries (often accounting for 10-15% for
developed countries, 20 -25% in developing countries).

For Vietnam logistics

revenue in 2008 is estimated at $18 billion larger than 3.5 times revenue of
telecommunications services. Although logistic services play very important roles
in development of the economy of the country, Vietnamese logistic services
providers still just only meet about 25% demand and most of them just only
participate in small stages of logistic services process. Rest

75% revenue is flowing into pockets of foreign businesses.

Furthermore, there are no logistic services providers who are competent to play a
leading role to push development of logistics in particular and the economy in
general in Vietnam.
With above analysis about potential, opportunities and urgent demands of logistic
market in Vietnam, we select topic for our capstone is "Development business
strategy in Logistic services for Viettel Post Joint Stock Company (herein called
“VTP” ) from 2010 to 2015. We hope our research will be useful references for
VTP to build their business strategy. We believe that with strengths and strong
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brand of VTP, VTP can participate in this lucrative market. This will contribute to
increasing development of the logistics services sector, promote growth of the
economy in Vietnam and increase more revenue and diversify business for VTP.

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II. OBJECTIVES AND APPLICATION OF CAPSTONE PROJECT

We compose this capstone project with objectives to draw overall pictures of
logistic market in Vietnam. We also analyzed external and internal environment,
industry environment, competitors of VTP in order to build a good development
business strategy for VTP in period from 2010-2015 to become one of a leading
logistic service companies in Vietnam. We hope that our capstone project is
practical and applicable in reality. VTP and other logistic service providers can use
it as reference document in building business strategy as well as other investment
projects in logistic services.

III. SCOPE OF RESEARCH

Logistic services are wide range for companies to research to achieve their
objectives. However, in frame of capstone, we will only concentrate to research
how VTP can build their development strategy to diversify their business in order to
gain more revenues from this lucrative market in period from 2010-2015.
IV. RESEARCH METHOD

We applied some following research methods to fulfill our capstone:
- Collecting and researching documents about logistic services in Vietnam from
different sources and websites.
- Working with VTP about our capstone projects, so they can allow us to approach
with necessary documents and information relating with our topic.
- Consulting and interviewing experts and key staff from VTP as well as other
experts in logistic services.
- Visiting some mode of logistic service companies in Ha Noi.
- Using theories in our MBA course such as marketing, finance, human resource,
statistic, strategy management as theory base to build business strategy for VTP.

V. STRUCTURE

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Our capstone was composed in three chapters. Chapter 1 we present strategic
management theory and some concepts about logistic. Chapter 2 is the most
important chapter in our capstone. We conducted analysis about external and
internal environment, opportunities and threats of market and assess current
business strategy of VTP Chapter 3 we propose development business strategy in
logistic services for VTP in period from 2010-2015 and solutions to improve

weakness in current business strategy.

CHAPTER I – THEORITICAL BACKGROUND
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Organizations are facing exciting and dynamic challenges in 21st century. In the
context of globalized business and negative influences of global crisis environment,
companies are required strategic thinking, so they can build good corporate
strategies and create competitive advantages to cope with crisis. A sustained or
sustainable competitive advantage occurs when firm implement value –creating
strategy of which other companies are unable to duplicate the benefit or find it too
costly to initiate. Corporate strategy included commitments, decisions and action
required for a firm to achieve strategic competitiveness and earn above return.
1.1 Concepts about strategy and strategy management
1.1.1 Strategy definition
There are many strategy definitions depending on point of views in different periods
of times. Some definitions of strategy are presented in the following:
According to Chandler (1962) “Strategy is the dominator of the basic long term
goals of an enterprise, and the adoption of course of action and the allocation of
resources necessary for carrying out these goals”.
Mintzberg (1979) stated that “Strategy is mediating force between the organization
and its environment: consistent patterns in streams of organizational decisions to
deal with environment”
Prahlad (1993) noted that “Strategy is more than just fit and allocation of resources.
It is stretch and leveraging resources”
Johnson indicated that “Strategy is unified, comprehensive, and integrated long
term plan that relates to the strategic advantages of the firm to the challenges of the
environment”
Mintzberg has identified 5P’s of strategy. Strategy could be a plan, a pattern, a

position, a ploy or a prospective
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A plan: A “How do I get there”.

•

A pattern, in consistent actions over times.

•

A position that is, it reflects the decision of the firm to offer particular
services and products in particular market.
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•

A ploy, a maneuver intended to outwit a competitor.

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A perspective that is vision and direction, a view of what VTP or
organization is to become.

1.1.2 Typical features of business strategy
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A business strategy must clearly define the key goals and business direction
for companies in each period.

•

A business strategy must be reflected in a continued process from strategy
formulation, strategy implementation to strategy evaluation and control process.

•

A business strategy must be built based on competitive advantages of firms
to ensure optimal mobilization and full exploitation of the firm’s resources like
manpower, capital, technique and technology, core competencies at present and in
future in order to promote advantages and grasp opportunities to gain comparative
advantages in the market.

•

A business strategy must show direction and guideline for firms to develop
continuously and firmly in disturb of business environment.

•

A business strategy must be built with fighting spirits to win in competition.
Business strategy is formulated and implemented base on realization and grasp of
business opportunities and take advantages comparative advantages of firms to
achieve higher efficiency of business performance.

•

A business strategy is only composed drafty about business direction of firms
in long term and frame of its business operation in future, so firms must combine

strategic objectives with economic objectives in reality. They also must evaluate
and control it to be suitable with business environment and conditions to ensure
efficiency of business operation and adjust weakness of business strategy.

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1.1.3 Role of strategy
Business strategy plays vital roles in business activities of companies. It helps
companies to
- Indentify their mission, objectives and business direction. It also can be considered
as guidelines for all their business activities.
- Seize business opportunities and build proactive measures to face with risks and
threaten on competitive market.
- Use efficiently their resources and strengthen their strategic competitiveness in
order to growth in sustainable ways.
- Have a firm base to build proper policies and make good decisions relating to
business or productions to cope with changes of market.
1.1.4 Level of Business strategy
A typical business firm should consider four levels of strategies as follow:
Corporate strategy: describes a company’s overall direction towards growth by
managing business and production lines. Corporate strategy will indentify industry
or industries firm have been doing or will penetrate. This strategy will cover
objectives, growth strategies as well as responsibilities with communities.
Business strategy or Strategic business unit (SBU): - Usually occur at business
unit or product level emphasizing the improvement of competitive position of a
firm’s products or services in an industry or market segment served by that business
unit. Business strategy falls in the realm of corporate strategy.
Functional strategy: It is the approach taken by a functional area to achieve
corporate and business unit objectives and strategies by maximizing resource

productivities.

It is concerned with developing and nurturing a distinctive

competence to provide the firm with a competitive advantage.
Divisional strategy: These are concern with how the component parts of an
organization deliver effectively the corporate, business and functional-level
strategies in terms of resources, process and people. They are at department level
and set periodic short term targets for accomplishment.
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1.1.5 Strategic management
1.1.5.1 Strategic management definition
“Strategic management is defined as a process to analyze external and internal
environment of a company at present and in future, setting objectives, crafting
strategy, implementing and evaluating of strategy in order to use efficiently their
resources to achieve their objectives”
1.1.5.2 Strategic management benefits1
Strategic management is basically needed for every organization and research
proved that organization who applied good strategic management would achieve
more success than organization did not. Strategic management offer several benefit
as follow:
Universal
Strategy refers to complex web of thoughts, ideals, insights, experiences, goals,
expertise, memories, perceptions, and expectations that provides general guidance
for specific actions in pursuit of particular ends. Nation have, in the management of
their national policies, found it necessary to evolve strategies that adjust and
correlate political, economic, technological, and psychological factors, along with
military elements. Be it management of national polices, international relations, or

even of a game on the playfield, it provides us with the preferred path that we
should take for the journey that we actually make.
Keeping pace with changing environment
The present day environment is so dynamic and fast changing thus making it very
difficult for any modern business enterprise to operate. Because of uncertainties,
threats, and constraints, the business corporation is under great pressure and is
trying to find out ways and means for their healthy survival. Under such
circumstances, the only last resort is to make the best use of strategic management
which can help the corporate management to explore the possible opportunities and

1 Strategic management- Unknown author.

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at the same time to achieve an optimum level of efficiency by minimizing the
expected threats.
Minimizes competitive disadvantages
Organizations can analyze their internal environment to identify their opportunities,
threat, weakness and strengths, so they can minimize their competitive
disadvantages and add up to competitive advantages by selecting proper strategic
management policies.
Clear sense of strategic vision and sharper focus on goals and objectives
Every firm competing in an industry had a strategy, because strategy refers to how a
given objective will be achieved. ‘Strategy’ defines what it is we want to achieve
and charts our course in the market place; it is the basis for the establishment of a
business firm; and it is a basic requirement for a firm to survive and to sustain itself
in today’s changing environment by providing vision and encouraging to defining
mission.
Motivating employees

One should note that labor efficiency and loyalty towards management can be
expected only in organization that operates under strategic management. Every
guidance as to what to do, when and how to do and by who is given to every
employee. This makes them more confident and free to perform their task without
hesitation. Labor efficiency and their loyalty which results into industrial peace and
good returns are the results of broad-based policies adopted by the strategic
management.
Strengthening Decision-Making
Under strategic management, the first step to be taken is to identify the objectives of
the business concern. Hence a corporation organized under the basic principles of
strategic management will find a smooth sailing due to effective decision-making.
These points are out the need for strategic management.

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Efficient and effectives way of implementing actions for results
Strategy provides a clear understanding of purpose, objectives and standards of
performance to employees at all level in all functional areas. Thereby it makes
implementation very smooth allowing for maximum harmony and synchrony. As a
result, the expected results are obtained more efficiently and economically.
Improved understanding of internal and external environments of business
Strategy formulation requires continuous observation and understanding of
environment variables and classifying them as opportunities and threats. It also
involves knowing whether the threats are serious or casual and opportunities are
worthy or marginal. As such strategy provides for a better understanding of
environment.
1.1.5.3 Strategic management tasks

Table 1.1: Strategic Management Steps

 Developing a vision and a mission
 Setting objectives accordingly with vision statement.
 Crafting a strategy to achieve objectives
 Implementing the chosen strategies in a planned way based on budgets and

allocation of resources, outlining the action program and task

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

Evaluation and adjustment strategy: create a review system to assess and
adjust strategy

1.1.5.4 Process of Strategic management
Mission and Objectives
External Analysis
(opportunities and risks)
Choosing and building strategies
Internal Analysis
(Identifying fundamental resources, capabilities, and potentials
Business Strategy
Global Strategy
Corporate Strategy
Altering Strategy
Harmonizing strategy, organizational design, and control system
Organizational Design
Control Design
Functional Strategy

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Table 1.2: The process of Strategic Management

Mission and main objectives
The first step of strategic management process is to explore and determine the
mission and main objectives of an organization. This can be considered as a
background to build strategies. Organizational mission is purpose for which or
reason why organization exist and it defines the culture, philosophy and grand
design of the firm. Main business objectives will identify what an organization will
achieve in short term and long term. Most of organization will prioritize to achieve
profit objectives and leading position first thanks to their dominant competitive
advantages and then they try to achieve what organization consider necessary to
have core competencies.
Environmental external analysis
The second step of strategic management process is to analyze external
environmental. This analysis will help us to identify Opportunities and Threats that
are outside the organization. The external environment can be classified into two
segments:
•

Macro environnent or Mega environnent.

•

Micro environment or Industry environment.

Macro Environment

Table 1.: The process of strategic management

Also refer to as general or Mega environment. The major constituents of mega
environment are PEST or STEP (P refers to Politico-legal environment, EEconomic Environment, S-Social-cultural environment and T-Technological
environment). These environments can further be classified into international,
regional, nation etc.... thus, depend upon the situation; an analyst may refer to the
global economic environment, the regional political environment or the national
social environment.
Micro Environment:

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Micro environment includes employees, shareholders, creditors, suppliers,
customers, and financial institutions, regulatory organizations, channels of
distribution, and special interest groups like consumer associations, and community
organizations. This environment has a substantial impact on an organization current
business. Consequently, development in micro environment becomes dominant
preoccupation of the management for strategic decisions. To avoid obsolescence
and promote innovation, a firm must be aware of technological changes that might
influence its industry. Creative technological adoptions can improve manufacturing
and marketing techniques.
Internal Environment Analysis
Laurence R. Jauch and William F. Gleuck define interal analysis as follow:
“Internal analysis is the process by which the strategists examine the firm’s
marketing and distribution, research and development, productions, corporate
resources and personnel, finance and accounting factors to determine where the firm
has significant strengths and weakness. Internal diagnosis is the process by which
strategists determine how to exploit the opportunities and meet the threats the

environment is presenting by using strength and repairing weakness in order to
build sustainable competitive advantages”.
Strategy formulation: is long development of long –range plan for effective
management of environmental opportunities and threats, in light of corporate
strengths and weakness. It includes defining the corporate mission, specifying
achievable objectives, developing strategies and setting policy guidelines.
Strategy implementation: is the process by which strategies and policies are put
into action through the development of programs, budgets and procedures. This
process might involve changes within the overall culture, structure, and/or
management system of the entire organization. Most of the times strategy
implementation is carried out by middle and lower level managers with top
management’s review, sometimes referred to as operational planning, strategy

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implementation often involves day-to-day decisions in resource allocation. It
includes programs, budgets and procedures.
Evaluation and control: is the process in which corporate activities and
performance results are monitored so that actual performance can be compared with
desired performance.
Strategy Amendment: Manager at all levels use the resulting information to take
corrective and resolve problems

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1.1.5.5 Selection of strategies
Generic strategies
The firms can select a proper competitive strategy among variety of competitive

strategies to take advantages their strategic competitive advantages (SCA). An
economist and a famous strategy researcher of Harvard University_ Dr Pr Michael
Porter supposed low cost strategy and differentiation strategy are typical strategies
all firms can apply and they are indispensable strategies among successful
strategies. Below is some description about these strategies.
Differentiations strategy
Here the aim is to achieve class leader ship by creating some things, which is
perceived as unique. Company can provide clients products with differentiation
that their competitors don’t provide for example: unique brand image, unique
technology, unique features or unique customer services etc… so the clients will be
happy with products and don’t care about prices with this differentiation strategy, so
companies can sell their products with higher price their rivals. However,
companies can’t increase their prices and their differentiation only is created in
order to achieve customer loyalty with their products. Companies pursuing this
strategy have major strengths in Research & Development design, quality control
and marketing.
Low cost strategy
In this strategy company makes all possible attempts to achieve the lowest cost in
production and marketing for example company can reduce their cost thanks to buy
cheaper input resources or use modern equipment and technology to increase their
productivities and reduce their production cost. The aims are to gain a large market
shares. However, company is not required to reduce their prices when they apply
this strategy. The company can reduce their cost in order to optimize their profits or
reinvest in marketing to increase their sales.

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Focus strategy
The underlying assumption in “Focus” is that a firm should be able to serve a

narrow strategic target effectively and efficiently. A company will able to focus to
serve a small group of their target customer in the segment of their target market.
This focus strategy will create competitive advantages for firms and firms will be
able to combine this strategy with two above mentions strategies (differentiation
and low cost strategy).
Grand strategies
Grand strategies, which are often called master or business strategies, are intended
to provide basic direction for strategic actions. Thus, they are seen as basic of
coordinated and sustained efforts directed toward achieving long term business
objectives. Grand strategies indicate how long range objectives will be achieved,
thus, a grand strategy can be defined as a comprehensive general approach that
guides major actions. Grand strategies includes four categories
- Growth
- Stabilities
- Retrench cement
- Portfolio restructuring.
Growth strategies
Organizations usually seek growth in sales, profits and market share, or some
measure as primary objective. The different grand strategies in this category are
•

Concentration.

•

Intergration.

•

Diversification

•

Mereger and acquitions

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Joint venture.

However, in frame of this capstone, we only refer diversification strategy which is
relating with VTP strategy.

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Diversification
Diversification is one of the grand strategies, which are basically growth strategies.
Basically, diversification basically involves change the business definition in term
of product range, customers or alternative technology. This diversification strategy
is applied when:
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Organizations in slow-growth industries may purchase firms in fastergrowing industries to increase their overall growth rate.

•

Organization with excess cash often finds investment in another industry
(particularly a fast growing one) a profitable strategy.

•

Organization may diversify in order to spread their risks across several
industries.

•

The acquiring organization may have management talent, financial and
technical resources or marketing skills that it can apply to weak firm in
another industry in the hope of making highly profitable.

Type of diversification
There are three types of diversification strategies: concentric, horizontal, and
conglomerate.
Concentric Diversification
Under concentric diversification new products and services are added to the line
with the condition that these product and services related to their existing
products/services carried by organization. For concentric diversification it become
necessary that the products or services added must be within the framework of
knowhow and experience in technology, product line, distribution channels or
customer base organization.
Horizontal diversification
When an organization adds unrelated products and services for existing customers,
this is called horizontal diversification. The strategy is comparatively less risky
because the customers are known. The organization is fully acquainted with
customer’s preference and their expectation about the quality and price of the goods

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and services. Horizontal diversification can be accomplished by acquiring the

shareholding of competitor, by purchase of the assets or by pooling of the interests
of the two organizations. Horizontal diversification seeks to eliminate competitors.
Conglomerate diversification
Conglomerate diversification is a growth strategy in which new products and
services are added which are significantly different from the organization’s present
product and services.
1.1.5.6 Techniques of scanning
Porter’s five forces analysis of competition
There are many companies can produce same or similar products or services that
they can be substitutes for each other. These one can meet basis requirements of
customers. The responsibilities of strategist are to analyze competition in micro or
industry environment to identify Opportunities and Threats with their companies.
We can use Porter’s five forces mode to analyze competition to formulate business
strategies. Porter’s model provides a process to make your competitive strategy
explicit so it can be examined for focus consistency, and comprehensive. Porter’s
approach is based on the analysis of five competitive forces.
 Threat of new entrants.
 Bargaining power of suppliers.
 Bargaining power of buyers.
 Threat of substitute products.
 Rivalry among exiting firms.

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Threat of new
entrants

Competitive
rivalry within

the industry

Bargaining
power of
suppliers

Density of
competitors

Bargaining
power of
customers

Threats of
substitutes

Table 1.3: Porter five force

Threat of New entrants
Firms entering an industry bring new capacity and a desire to gain market share and
profits, but whether new firms enter an industry depends on the barriers to entry. In
addition, established firms in an industry may benefit from experience curves
effects. That is, their cumulative experience in producing and marketing a product
often reduces their per-unit costs below of inexperienced firms. Is general, the
higher the entry barriers, the less likely outside firm are to enter the industry.
Bargaining power of suppliers
Suppliers can be competitive threat in an industry because they can raise price of
raw material or reduce their quality. Powerful suppliers can reduce the profitability

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