Question Onel 5 marks] FIVE FORCES E, a well known cosmetics manufacturer, obtains worldwide sales for its global brande

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Question Onel 5 marks]
FIVE FORCES
E, a well known cosmetics manufacturer, obtains worldwide sales
for its global branded products. The directors pride themselves on
having a clear understanding of E's consumer market which consists
of both men and women. Its products mainly comprise deodorants,
perfume, after-shave lotions, facial and body washes.
In carrying out an analysis of its competitive environment, The
Marketing Director has applied Porter's Five Forces models and
analyzed the factors which affect E under each heading as
follows:
Threat of entry: Little threat as although major competitors
exist, the size of E presents a large entry barrier. Power of
buyers: Very important as customers worldwide have much choice from
different
competitors' products.
Power of suppliers: Little threat as most suppliers of materials
are small scale and E could easily source from other suppliers if
necessary. Labor is relatively cheap in E's product facilities in
developing world locations.
Substitute products: They are many alternative products offered
by competitors but there is little by way of substitute for
cosmetics, and therefore this poses a little problem.
Rivalry among competitors: There is strong competition in the
cosmetics market with new products constantly being developed, an
therefor this is a major threat.
The Marketing Director is reasonably confident that he has
judged the impact of these competitive forces correctly as they
apply to E. However, he would like some reassurance of this. He has
asked you, as Management Accountant, to provide some appropriate
performance indicators by which the strength of five competitive
forces as they apply to E can be judged.
Required:
A) Recommend to the Marketing Director suitable performance
indicators which could be used to judge the strength of the five
competitive forces as they apply to E. Discuss why you consider
your recommendation to be appropriate.
B) Explain the sources of entry barriers for potential entrants
into a new industry.