Heavy Equipment Rentals is the dominant firm in the machinery rental industry, w
ID: 2628472 • Letter: H
Question
Heavy Equipment Rentals is the dominant firm in the machinery rental industry, with more than 70% of the Euro-zone market. Heavy Equipment Rentals rents heavy equipment to construction companies, household equipment to consumers, and transportation equipment including trucks, containers, and railroad cars-to the shipping industry. Heavy Equipment Rentals provides a wide range of equipment for rental, representing dozens of manufacturers. Many of Heavy Equipment Rentals' customers are global corporations that use Heavy Equipment Rentals equipment in times of high demand and account for significant percentages of Heavy Equipment Rentals' revenues. Heavy Equipment Rentals' new Chief Executive Officer, Jack Black, is unhappy with the historically thin margins of the machinery rental industry. The enormous capital investment required, and the negligible marginal cost of rental, make fixed costs the determining factor in profitability. The fact that all rental companies provide the same types and brands of equipment makes the decision to rent from one company versus another largely a matter of cost. Jack has decided that he wants to use Heavy Equipment Rentals' position as the industry leader to change the industry structure and make it more attractive. He is particularly concerned about the ability of homeowners to get advice about renovation that would encourage them to rent home remodeling equipment. He is considering the purchase of a home remodeling consulting firm. Products such as home remodeling advice would best be characterized in a Porter Five Forces framework as:
Answer
an outside industry characteristic not relevant to a Porter Five Forces analysis.
an example of bargaining power of suppliers.
an example of bargaining power of buyers.
an example of threat of substitutes.
a factor that influences Porter's Five Forces.
a.an outside industry characteristic not relevant to a Porter Five Forces analysis.
b.an example of bargaining power of suppliers.
c.an example of bargaining power of buyers.
d.an example of threat of substitutes.
e.a factor that influences Porter's Five Forces.
Explanation / Answer
The Porter
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.