In-class discussion questions for Jan 16

• What does it mean by a bargaining power of buyers? When would buyers have a strong bargaining power?
• Any example of switching costs for buyers?
• Suppose you’ve got $300 millions from winning a lottery. You want to start a new airline company. What does it takes for you to make the first flight take off?
• What would be substitutes for a travel by flight? Wha would be substitutes for grocery stores?
• According to the Otis case, which business is more profitable? Elevator manufacturing or service?
• In the Otis case, “The service market attracted many participants because of its steady demand, low barriers of entry, and high profitability.” (p. 3) Doesn’t it mean that the service market is not profitable for Otis?

We will discuss these questions in-class on Friday, Jan 16. Do not post comments on this.