A friend of yours from college, who you haven’t talked to in 3 years, sends you
ID: 419981 • Letter: A
Question
A friend of yours from college, who you haven’t talked to in 3 years, sends you an email asking you to meet him for lunch. He says he’s got a great idea for a business and wants to run it by you. At first you’re hesitant because your friend, while obviously intelligent, doesn’t always think things though. You agree to meet for lunch and talk about the idea. At lunch he explains that he’s been developing new flexible screens for his employer that are incredibly tough, waterproof, and use very little energy. His idea is to use these new flexible screens to create wearable computing clothing that can connect directly to smartphones and push ads, promotions, and video. His only problem is that he knows nothing about business. He’s not sure where to start.
a. Explain how you could use the five forces model to help your friend understand the potential success of his wearable flex screens.
b. How might understanding the unique forces affecting this industry determine the competitive advantage for your friend’s new company?
Explanation / Answer
a. the five forces are:
2. as the firm is new and the product also new, there is no problem of immediate competiton. first if we file a patient to the product and starts production, till some time period we wont worry about competiton. once we started production and hit in the market commercially, then producers prefer to modify the same product and introduce new product in the segment. but by the time we need to establish in the market with good number of customers, with established market, and also provides economies of scale.