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Phase I Mindmap

by Mingdi Xin 02/07/2012



by Mingdi Xin 1. Decrease the buyer power through implementing loyalty programs which makes clients more dependent on us.

2. New node

3. Because food is a perishable item, the time involved in the delivery is crucial.

4. Group 401 (Good Foods Canada)

4.1. Suppliers would be the most important for the food industry.

4.1.1. They have the ability to tell you what you can stock and dictate what you can sell

4.1.2. Have a lot of bargaining power with regards to the fact that they supply to more than one grocery store

4.1.3. Without a good relationship with the supplier, it would be difficult to build good relationships with customers

4.1.4. Suppliers have the ability to change price and the prices that they charge you

4.1.5. The food industry has high turnover and suppliers are crucial for efficiency and logistics

4.1.6. Suppliers play a key role in providing the overall value to customers.

4.1.7. Without an efficient supplier, you may either be overstocked or run out of stock and this will negatively impact your relationship with customers

4.1.8. Since we are a small chain, the suppliers hold more power and are extremely influential

4.2. Reasons the other factors are not as important:

4.2.1. Traditional competitive rivalry

22.214.171.124. There are few, but significant competitors in the organic foods industry. However consumers have brand loyalty towards a local chain

4.2.2. Buyers

126.96.36.199. Though buyers do influence what products are sold in the store, they are considered price takers in the organic food market

4.2.3. Entrants

188.8.131.52. It is difficult to enter into the small organic foods industry as the loyalty already exists and it is difficult to establish a relationship with large suppliers. It is also difficult to break into the market when there is already a firm base of organic food chains.

4.2.4. Substitutes

184.108.40.206. Consumers buy organic for a reason (health, sustainability, etc). They will tend to avoid Wal-Mart type stores for groceries.

220.127.116.11. Restaurants would be a substitute, but many consumers would not be able to afford to eat out every single meal

4.3. Good- The map tapped points taught in class into their own context, improved class material, the rationals for the unimportant points are well stated, however the reasonging part for the important one is not fully organized and there existed some overlaps.

5. Discussion Question: Which of the five forces is the most important for your industry? Why?

6. Group 405

6.1. Substitutes is the most important force for our industry.

6.1.1. Companies can have their own cost-efficient Human Resources department instead of using City Workforce's services.

18.104.22.168. By incorporating the use of online technology, companies could substitute the labor force with various online websites that have lower costs (ex. monster.ca)

6.2. Buyers would not be able to drive prices down because City Workforce supplies labor for other companies and these companies needs our service unless their own internal HR department is able to do their own recruiting, processing, and selecting.

6.3. Since there are a limited supply of labor force available for this market, it would be more difficult for competitors to enter, since the existing supply are already well established and have built their reputation and customers.

6.3.1. Competitors can only enter the market if they can offer the supply of labour at a cheaper cost to employers. But if they have a lower pay for the labour force, the labour force would resign and work for other companies that would pay them more.

6.4. Adequate+ The map improved learning materials in the course by tapping points into their own context, the reasoning is good but the structure is not clearly displayed.

7. Group 406: City Workforce

7.1. Suppliers (Most Relevant to City Workforce): Companies that need labour; members of the labour force that are looking for jobs.

7.1.1. While all the forces need to be considered when deciding on entering an industry as they are all important, supplier power is the most important overall. All decisions that a firm faces while in business are directly related to either their suppliers or customers, and supplier power can be applied to both. Every business operates around the needs of their customers, and it is pertinent to identify who their targeted segments are. By identifying a firm’s customer base, the firm can then determine a business model best suited to increase their supplier power with customers. It is ideal for all firms that their supplier power be maximized as this will allow for maximum market share. On the other hand, businesses all need to take into account when deciding on their products and services how much influence their suppliers have. Ultimately, supplier power is the most important of the five because it can be applied to both sides of the supply and value-chain process, and is crucial when deciding on the best business strategy.

7.2. Buyer Power: Ability to match successfully with employers, high percentage rate of matching. Post-secondary institutions, public and private high school. As amount of workforce and job scarcity goes up, supplier power goes down. Skilled worker demand goes up or down, City Workforce is affected the same way.

7.3. Threat of New Entrants: Companies who can offer a cheaper way to match employers, or companies with a deep history that are able to match with more prestigious firms

7.4. Substitutes: Other firms that offer interning, post-secondary co-op program. Website job boards such as monster.ca, craigslist.org that can offer a cheaper means.

7.5. Rivalry: Difficult to gain competitive advantage over competitors.

7.6. Adequate The map improved lerning materials by tapping points into their own context, the reasoning is weak for it only explained what is the five forces rather than give a detailed description why supplier is the most important others are not.

8. Group 407: Good Foods Canada

8.1. Important: Suppliers

8.1.1. Without suppliers, the grocery store would have no groceries to sell. Finding and maintaining a pool of suppliers that can provide good quality products is critical to success among other competitors.

8.1.2. High Switching Cost: It would be costly and unrealistic for our company to switch over to other suppliers if needed. Therefore, the current supplier would have significant power over our company.

8.2. Less important: Rivalry

8.2.1. Rivals will have a difficult time competing with a well-established grocery store, because with convenience products or foods, consumers will only purchase whatever is cheaper.

8.3. Less important: Potential New Entrants:

8.3.1. Low threat because the barriers of entry are high due to regulations and economies of scale (for the foods industry, newcomer's cost per product is higher).

8.4. Not most important: Buyers

8.4.1. Consumers will sometimes go to another grocery store if they believe that Good Foods Canada's prices for apples are too high. But they will rarely do that, because the price of gas is higher than saving $00.20 on apples. They are captive people at the bottom of the pyramid of needs, forever hungry, trying to find a food source to survive.

8.4.2. Buyers are fragmented and numerous.

8.5. Not most important: Substitutes

8.5.1. Very few substitutes for food.

8.5.2. Prices are inelastic for food.

8.6. Adequate- The map included five forces and gave explanation for each force under the company's context, but the reasoning is hard to understand, more detail is needed.

9. Group 416

9.1. Potential Entrants

9.1.1. Not as important as DataMed is one of the largest medical clinics located in Vancouver. Government regulation creates a difficult environment for those who want to open up a clinic. Strong entrance barriers.

9.2. Buyer Power

9.2.1. DataMed services the public who are not able to negotiate prices for medical services. The customers are price takers in this industry.

9.3. Substitute Products

9.3.1. Many government restrictions and medical practices in general are very regulated. There are not many substitutes aside from a few alternative medicines, all of which DataMed will most likely carry.

9.4. Supplier Power

9.4.1. Supplier power has the largest effect because the costs for pharmaceuticals and medical equipment are very expensive. There are not many alternative options for equipment and pharmaceuticals so suppliers can negotiate a high price which consequently will increase DataMed's costs. New technology is constantly developed and costs are high to obtain these technologies. There is a high demand for health care products as illnesses are more frequent.

9.5. Rivalry

9.5.1. Although DataMed is one of the largest medical clinics in Vancouver, they must boost their customer service and assist in educating the public about health issues in order to differentiate themselves from their competitors. Clinics are more location-based.

10. Group 417 (MoveIT)

10.1. Supplier Power

10.1.1. As a moving company, there is not much supplier power. It is because the company is only suppling trucks and they only need a few.

10.2. Buyer Power

10.2.1. There are some buyer bargaining power. Because there are a lot of different moving company in the market, switching cost is very low. Potential customers or past customers might easily switch to another companies.

10.3. Potential Entrance

10.3.1. We believe this is the most important force among the five forces. As the description mentions, the industry is growing very fast; leading to numerous firms joining the industry. This leads to rivalry problem since there are a lot of competition in the market. Moreover, with many new entrants, companies will try drive down cost to attract consumers leading to price wars and buyers bargaining power.

10.3.2. In order to start the business, the setup costs are very low. We only need a few trucks and there is no barrier to enter the market.

10.4. Substitute

10.4.1. The only substitutes available are companies like U-Haul, and for now they do not constitute a hugh threat to traditional moving companies like MoveIt

10.4.2. Other industry might have a better price or discount, which lead to buyers propensity to substitute is large.

10.5. Rivalry

10.5.1. Rivalry force is Important but not as important as potential entrance. There are a lot of competitors in the market with an approximately equal size. However, the industry is growing pretty fast, so the fight for the market share isn't very intense.

11. Group 418

11.1. Good Foods Canada is mostly affected by suppliers.

11.1.1. Quantity

22.214.171.124. The business should make sure the suppliers can supply the amount of products they need.

11.1.2. Time and temperature

126.96.36.199. Because food is a perishable good, the time and temperature involved in the delivery of the products is crucial.

11.1.3. Price

188.8.131.52. Suppliers determine a price for the store and then the price for customers is determined

184.108.40.206.1. With organic produce and meat becoming more and more in demand these days, more organic grocery stores are appearing which gives suppliers more bargaining power since there are now more buyers for suppliers to choose from

11.1.4. Condition

220.127.116.11. Suppliers sell products to the company and then the company sells it directly to consumers. So, the condition in which the suppliers deliver the product is important

11.1.5. Packaging and Handling

18.104.22.168. The handling of products is determined by the suppliers. It involves the transportation method and also the packaging and presentation of the goods.

11.1.6. Variety

22.214.171.124. a good organic food supplier should not only provide organic fruits and vegetables, but also organic meat, poultry, dairy products and organic processed food.

126.96.36.199.1. an increasing variety of organic products will open the market to more consumers

11.1.7. Quality

188.8.131.52. The quality of food is an important aspect consumers consider when buying. Thus, suppliers play an important role.

184.108.40.206. Suppliers can advertise and produce higher quality products, they can use that to to charge higher prices.

11.2. Rivalry and Potential Entrants

11.2.1. There will be a relatively large number of potential entrants into the foods market, since the cost to start a grocery store/food store is relatively low. However, it is not easy to establish a brand loyalty. So customers will often go to the store they usually go to, unless the price from a new competitor is dramatically less than the other.

11.2.2. For competitors it's almost the same as entrants. If customers have a loyalty to the store they usually go to (i.e. Safeway or SuperStore), they won't change a store easily. However, one different thing that we have to consider about competitors is location. Customers will however, look for a convenient store to go for shopping.

12. Group 419

13. Group 420

13.1. Good Foods - Suppliers

13.1.1. Revenue is based on products that are supplied rather than manufactured

220.127.116.11. The cost of suppliers also directly affects the revenue of the company

13.1.2. Suppliers affect important aspects of distribution

18.104.22.168. Quality of product

22.214.171.124. Quantity of product supplied

126.96.36.199. Perishability of the product

188.8.131.52. Ensuring product is received on time

13.1.3. It is important to have credible suppliers that are following ethical practices

184.108.40.206. Sustainability

220.127.116.11. Environmental Awareness

13.1.4. Limited supply of Organic Food suppliers

18.104.22.168. Important to establish strong, long-lasting relationships

14. Group 415 CITY WORKFORCE

14.1. In the case of City Workforce, Buyers would be considered the most important of the 5 forces. Buyers would be referring to the employers who are looking for employees. During a recession, the demand of jobs would be high and the supply of jobs is low. This leads to and excess supply of employees in the market. Given this excess supply of people looking for jobs, it is more important for City Workforce to find the buyers first.

14.1.1. clients(buyers) are most important! This is because buyers have the most bargaining power. In a recession the supply of workers is large, however the demand to employ workers are small, and hence the buyers' bargaining power is larger as they have more control over how much they want to pay for a employee.

22.214.171.124. New node

14.1.2. Suppliers (workforce) bargaining power is a lot smaller because there is a lot of supply (during recession) and most employees will be looking for employment and the compensation would be less important

14.1.3. Quality and diversification is important in terms of the supply of workers; this could be a potential reason why supply would be important, however(given the recession) we believe buyers have the most influence and importance on City Workforce.

14.1.4. The pool of buyers is not large because during this recession most employers(buyers) will not be hiring. Therefore the pool of applicants(suppliers) is not as important as keeping the current buyer base.

14.1.5. The threats of substitutes is not high because most companies do not want to hire employees directly nor for the long term because it is very costly to train and employ a person full time. With the given situation companies want a cheap, fast and easy way to get a worker, but not have the costs of actually employing a person, and hence they would not employ a person directly but instead contract workers from companies such as City Workforce.

14.1.6. There are large competitors such as HR Block & Man Power, but given the economic situation, competitors are not the most important force at this point of time.

15. Group 414

15.1. Good Foods Canada: affected by suppliers

15.1.1. There is a limited amount of suppliers available as there are already a few dominant players in the organic foods market (Whole Foods)

126.96.36.199. Challenge: Have to produce organic food and produce within the local area

188.8.131.52.1. Good Foods Canada has a differentiated product in a sense because they only buy DIRECTLY from (organic) farmers and sell their products in-store and also ONLINE which is relatively new to the food industry.

15.2. Customer power is the most important force because:

15.3. 1. The company is a small chain company there are other choices like to buy food from companies like Safeway. If customers are not satisfied with the price they will simply go to other places and buy food.

15.4. 2. The feature of organic food only attracts a portion of customers, most other customers don’t care about the food is organic or not. There are plenty of existing substitutes like ordinary food.

15.5. 3. Since there are plenty substitutes, buyer’s price sensitivity is relatively high.

15.6. 4. The buyers’ cost to switch from buying organic food to other type of food are low sometimes even negative. So rational buyers will consider their opportunity cost to buy organic food.

15.7. 5. The market of organic food is not as large as the ordinary food market. The customer volume is small, so the decision of these customers will influence the company greatly.

15.8. 6. Nowadays, customers can get information easily. They can get the price of food in other food stores via internet, mail, or simply taking a visit. Thus, customers can compare prices easily and then make decisions. That will affect the store’s price setting process greatly.

15.9. Why others are not as important as customer power is because:

15.10. 1. For suppliers, it is as important, if not more important, for the suppliers to sell their food as it is for Good Food to buy organic food from suppliers. Since the market is competitive, supplier power is not as important as customer power.

15.11. 2. For rivalry, the local competitors share the same prospect and situation with Good Food. And those big international competitors will have a great transportation cost and purchasing cost.

15.12. 3. For threatens from new entrants, the organic food market is not a big market, and the local supply of organic food is limit, the cost entering the market will be high since they have to transport organic food from farther places.

15.13. 4. For substitutes, buyers of organic food have a preference to organic food if the price is accepted by them.

16. Group 413

16.1. DataMed

16.2. NOT:

16.3. Customers: since customers can't bargain on the price of the medical fee therefore no way to drive the price down

16.4. New entrants: since new entrants are hard because private clinics have a service quality differentiation and loyalty system

16.5. Therefore: health care=quality (differentiation) over cost leadership (low price)

16.6. Rivalry: since based on quality (differentiated) service delivery and loyalty system, the trend is the first of contact with the health care system

16.7. In other words, when patients go to a clinic, they rarely debate on which one to go, usually where they are familiar with and verified the service's competency

16.8. Substitute: since the only case when there would even be a substitute is when the clinic don't specialize in an area of medical treatment or when the time slot is full

16.9. Medical treatment is not like buying coke, where if there's no coke you can get pepsi so if the clinic is full, you can't just go to a cosmetic clinic, you still have to go to another clinic (in other words only direct competition)

16.10. Therefore, that leaves suppliers:

16.11. contribution factors to a high supply cost:

16.12. health care grew to be 11.7% of the GDP in 2010 or $5,614 per person (30% is private)

16.13. 1. the aging of the baby boom generation

16.14. 2. generating rising rates of chronic diseases

16.15. 3. high cost of new technology and research

16.16. So while the health expenditures paid to physicians has declined, spending on drugs has greatly increased

16.17. The government at this time is generating a policy of wait time reduction by: (so more slots for appointments)

16.18. 1. training and hiring more health professionals (increased health professionals' compensation)

16.19. 2. promoting community health programs (cost with professionals set aside for the job)

16.20. 3. developing and implementing tools to better manage wait times (cost and demand for IT)

16.21. As we know, a higher demand for health care (personnel, technology, tools, and drugs) drives the prices up increasing the area the suppliers can bargain

17. Group 412

17.1. Substitute Products & Services

17.1.1. Due to unstable stock market conditions, customers will be inclined to invest their money elsewhere. Other factors such as a declining economy and increased unemployment may cause customers to search for more stable investments such as bonds or bank interest.

17.1.2. There may be other industries such as insurance, where people may choose to invest their money

17.1.3. Threat of substitute products or services for VAnalyst is high because 1) Switching cost to new products (safer investments) is low 2) Buyer propensity to substitute is high

17.1.4. VAnalyst underlying issue: stock market experienced frequent sharp rises and declines. This uncertainty has negatively impacted VAnalyst's portfolios and caused clients to be wary of continuing to do business with the firm.

18. Group 411

18.1. Competitors

18.1.1. When you think of choosing a realtor you often think of larger, more established companies than Vanrealty

18.2. Buyer Power

18.2.1. In the Vancouver real estate market, buyers are quite easy to come by.

18.3. Threat of subsitutes

18.3.1. If you're selling a property, there aren't that many substitutes to using a realtor

18.3.2. There is a possibility that sellers directly sell to buyers, however this is unlikely beacuse it would mean sellers finding a way to reach their potential customers bythemselves which is considerably harder than if the seller chooses to sell through a realtor (where realtors match potential buyers and seller)

18.4. Supplier Power

18.4.1. It is suppliers who control if they want to sell and what Vanrealty can actually offer to its consumers. This changes all the time which makes Vanrealty dependent on its suppliers.

18.4.2. If Vanrealty cannot agree to terms with its suppliers, the suppliers can simply use a different realty company. Vanrealty does not hold much power.

18.4.3. Ultimately if there were no suppliers (ie. people selling their houses through Vanrealty) it would be impossible for the company to exist

19. Group 408

19.1. Rivalry among existing competitors

19.1.1. existing companies fight for market share

184.108.40.206. perfect competition

220.127.116.11.1. high number of competitors

18.104.22.168.2. goods lack differentiation

22.214.171.124. one way they can get the market is through lowering price (or aim for 'more for the same / more for less' value proposition)

126.96.36.199.1. price war!

19.2. Low bargaining power

19.2.1. consumer has more bargaining power because there are other companies offering similar services: perfect competition

19.2.2. no switch cost for customer -- reduces bargaining power

19.2.3. you can't really expect customer loyalty - because you only use it once in ... 20 years?

19.3. threat of substitute products or services

19.3.1. no common competitors: people just have to use the services of these movers (especially the international students/immigrants)

19.4. threat of potential new entrants

19.4.1. new entrants can enter the market easily since the startup cost is not too big: they can start work with a van and a few people to move stuff

19.5. Weak+ The map is more like a working sheet not a summary of your group's discussion. The most important force is not evidently shown in this map, reasoning is weak and hard to understand, the structure and logic is poor.

20. Group 409

20.1. DataMed Medical Clinic

20.1.1. Buyer

188.8.131.52. The company earns its revenue through providing services to patients. Therefore, attracting and maintaining customers is a top priority. The buyer has access and complete freedom to visit another clinic if he/she chooses to do so, so buyers have significant power.

184.108.40.206. This industry depends a lot on the health-consciousness of the public. If the public is more concerned about their health, they are more likely to visit clinics; therefore it is very important for DataMed to pass on health information to the customers through information booklets, the internet, etc.

20.1.2. Suppliers

220.127.116.11. Suppliers often have high control over the price of medicine or medical equipment as they often have a monopoly over selling these goods due to patent laws. This lasts for several years before other companies can begin producing these goods.

18.104.22.168. DataMed needs to have an extended network of suppliers to be aware of and have access to new drugs to maintain a competitive advantage. They can also seek lower prices for drugs, for example, by buying drugs from abroad where this is legal and cheaper.

20.1.3. Potential Entrents

22.214.171.124. Low Impact

126.96.36.199.1. Privately registered clinics are not funded by the Government or given other Government grants. Therefore it is more difficult for a private clinic to enter the market than a publicly subsidized one.

188.8.131.52.2. To operate in this market they must follow a set of government standards and regulations therefore making it more difficult for new firms to enter.

20.1.4. Substitutes

184.108.40.206. Significant Impact

220.127.116.11.1. Because DataMed is a private clinic, publicly subsidized clinics serve as a strong substitute. Hence, private clinics need to provide superior, unique, or more timely services, or otherwise justify the higher premium they charge patients.

20.1.5. Rivalry

18.104.22.168. Low Impact

22.214.171.124.1. Since it is hard for new firms to enter, and because of heavy government regulation, there is limited rivalry in the market.

126.96.36.199.2. The firm will need to keep up with medical and technological advances or keep a high quality services in order to maintain its customers.

188.8.131.52.3. Competition could directly decrease sales and range of clientele. Competitors could introduce new treatments or technologies to attract rivals' customers. While there is limited competition, it is still important to establish a strong relationship with customers to minimize customer attrition.

20.2. Good The map improved learning materials and the content is comprehensive and the reasoning is good. However, it is no clear whether Buyer and Suppilers have significant impact or insignificant impact?

21. Group 410

21.1. Competitors

21.1.1. Low barriers to entry, because any other competitors can enter the industry at will

21.1.2. Difficult to differentiate your company from others

21.2. Substitutes

21.2.1. Indirect competitors such as Craigslist do not offer the same level of expertise and knowledge that realty companies do, therefore do not pose a significant threat

21.3. Suppliers

21.3.1. Not as important, our company is a middle person between someone trying to sell their house. Suppliers would be considered those requiring our services.

21.4. Buyer Power

21.4.1. Not as important:

21.5. Adequate The map's content is fine and relevant to the course, reasoning is also fine, but more details is needed to better illustrate the problem.

22. Group 404

22.1. We can do this by starting up new management systems to run more effectively and efficiently and ultimately increase our power

22.2. New technology will help reduce costs, increase their competitive advantage.

22.3. Unacceptable not finished

23. Group 403

23.1. missing

24. Group 402 MoveIT

24.1. New Entrants (most important)

24.1.1. Startup costs are very low. ( a few vehicles,drivers, movers)

24.1.2. It is a "student & immigrant" city, so there is a high demand for such services and combined with low startup costs, this business proves to be attractive for potential startup firms

24.1.3. There is definite space for improvement to beat existing firms since MoveIt is operating on paper information and struggling to expand their market.

24.1.4. No siginificant leader in market which leaves space to develop consumer loyalty

24.1.5. no barriers to entry (government regulations, patents, etc.)

24.2. Substitutes

24.2.1. DIY moving industries that simply lend vehicles an customers move goods themselves

24.2.2. Customers can move the goods themselves

24.3. Buyer Bargaining Power

24.3.1. Low switching costs, which makes this a more important factor

24.3.2. Prices can be brought down since there are a lot of Moving companies in vancouver (such as Ferguson Moving & Storage, Student Movers, Careful Movers, Budget City Movers)

184.108.40.206. Customers do have the power to choose from certain companies that have differentiated themselves by setting up a certain value proposition, but other than that the operations are still the same (getting something from point A to point B). So, buyer power isn't that significant given the context.

24.3.3. standard/undifferentiated service

24.4. Supplier Power

24.4.1. reason for high power

220.127.116.11. there is a high demand(student/immigrants),which gives the employer more power(pricing, scheduling,etc)

24.4.2. reason for low power

18.104.22.168. the product is not unique

22.214.171.124. low switching costs

126.96.36.199. forward integration

24.5. Rivalry

24.5.1. Moving Firms In Vancouver - Ferguson Moving & Storage, Student Movers, Careful Movers, Budget City Movers

188.8.131.52. Most of these firms aren't leaders in the industry yet, so traditional rivalry isn't that important since they are more or less in the same situation as MoveIT (haven't expanded yet, have a couple of trucks/vehicles, few drivers etc

184.108.40.206.1. So, if MoveIT gets over its problem of expansion, it could be a leader in the market

220.127.116.11. Before even getting to the main rivalries it's improtant to fend off the new entrants. MoveIT is not even a "proper" company yet (it only has a couple of trucks and driver etc) and on top of that it can't expand, which means it can easily fall prey to new entrants starting out

24.6. Adequate The map covered all points taught in class related to the five forces.The reasoning is weak for there lacks clear explanation for why New Entrants is the most important while others are not, plus some of the reasoning is not well explained and can't be fully understood.

25. New node

26. New node

27. New node
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