Case Study

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Winstina Dauphin
Business Policy
Case Study

1) What are the dominant economic characteristics affecting the payday lending industry? The dominant economic characteristics affecting the payday lending are as follows government regulations and restrictions, Competitor saturation, and the current recession. (Essentials of Strategic Management, pg. 487)

2) What is competition like in the payday lending industry? How strong are each of the competitive forces that make up Porter’s Five Forces Model? What do your strength ratings reveal about the overall attractiveness of the payday lending industry? Competition in the payday lending industry is momentous. The order of competitive forces from strongest to weakest in Porter’s five forces model are as follows: Potential Entrants – Substitutes- Industry Rivalry- Buyers- and Suppliers. Potential new entrants help discharge the pay day market which drive demand down in individual stores (the entries to barrier are extremely low 135k for startup), substitutes such as credit cards offered by Providence, current industry rivalry also proved to be a competition force that affected individual pay day locations. (Essentials of Strategic Management) 

3) What are the driving forces that are currently affecting the payday lending industry? Driving forces that are distressing the payday lending industry are entry or exit of major firms, regulatory influences and government policy changes, marketing innovation, and lastly changing societal concerns and attitudes. (Essentials of Strategic Management, pg. 491)

4) What are the prevailing key success factors that most industry members ability to prosper in the marketplace? That they offer pay day loans quickly and conveniently, they know how to deal with credit cards efficiently and they were able to deal with regulations efficiently and fast. (Essentials of Strategic Management)

5) What is Cash Connection’s strategy for competing in the financial services industry?...
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