At this point, which force do you think should be our biggest concern? John That's probably the biggest threat. What makes the threat from new entrants such a big deal? Select all that apply, then click Submit below There are lots of competitors that are all pretty much the same. Outsourced manufacturing makes it easy for anyone to enter the industry. Patents and regulations are not important in this industry. Any new entrant needs to overcome network effects to get into the industry. Customers are not loyal to the brands already in the industry. Industry Background Industry Background Facts Industry is projected to grow at 1.5%/ year for the next few years Lighting fixtures industry is roughly $4 billion worldwide Manufacturing - Mostly smaller manufacturers - Few, if any, manufacturers have a recognized brand - Popular designs are rapidly copied - Patents offer little protection - Technology for internet-connected smart fixtures is growing slowly - Creating specialized production lines is necessary Distribution Channels - Many smaller manufacturers sell directly through large retailers such as Home Depot, Target, and Walmart - Some retailers offer their own private label brands - Large manufacturers sell directly through their websites (as well as through retail) - Individuals often compare prices across all channels before making a purchase Suppliers - Primary materials are commodities like metal, wood, plastic, and glass - Most manufacturers use a wide variety of suppliers for these commodities - Each commodity has a large number of suppliers from which to choose Startup Process - An efficient factory can cost between $1550 million dollars - Outsourced manufacturing can reduce initial costs for a niche player to less than $100,000 - The regulations are simple and straightforward for lighting fixtures - Marketing expenditures can be controlled through targeted ads