1. What are the dynamics of the store-brand industry in context of Porter's five forces model? The risk of entry by potential competitors in the store-brand industry is low. This constitutes a high barrier to entry. Incumbent companies try to discourage potential competitors from entering the industry, since the more companies enter the more difficult it is for established companies to hold their share of the market. The greater the costs that potential competitors must bear to enter and industry, the greater are the barriers to entry. The store-brand industry has brand loyalty, absolute cost advantages, economies of scale, and government regulation. All of these features help to raise the entry barriers, thus decreasing the threat of new competitors. The rivalry among established companies is strong. The store-brand industry is highly fragmented; however, the pharmaceutical industry is consolidated. Fragmented industries usually have low barriers to entry and offer co!
             mmodity-type products that are hard to differentiate. The result is a store-brand pharmaceutical industry that has high entry barriers and difficult to differentiate products. The bargaining power of buyers is not as high as that of the pharmaceutical industry. This is because the cost to the retailer of a store-brand product is generally significantly lower than that of a national brand product. However, this is not to say that their bargaining power is low. The store-brand industry does rely heavily on retailers for a large percentage of its total orders. Retailers buy in large quantities and, thus, can use their purchasing power as a leverage to bargain for price reductions. The bargaining power of suppliers is dependent on the company. In Perrigo's case, the suppliers of the chemicals required for production have a high bargaining power because they supply all of Perrigo's chemicals. However, the bargaining power of some of their other suppliers i...