Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 28

Many would argue that the TV manufacturing business has become largely a commodity business, and competition is based on price, with many good brands offered at low prices at retailers such as Wal-Mart. The manufacturers of TVs are said to have a barrier to entry from other potential competitors because the existing manufacturers (Phillips, Sony, Samsung, etc.) have spent huge sums to develop their brands and manufacturing facilities. In recent years there has been a large growth in the number of contract manufacturers (such as Flextronics) that manufacture TVs for the large firms. How does this affect the competition within the industry? Are there now new opportunities for smaller manufacturers of TVs?

Step 1 of 3

A business affects and is affected by the environment in which it operates. These are internal and external factors. Internal factors are those factors which affects directly to a business. External factors are those which are not in control of the business.