Topic > Rio Tinto Case Study - 882

Product homogeneity is described as goods and services of the same or comparable nature. Because goods are homogeneous, companies feel committed to competing for whatever relative points of interest they can raise relative to their opposition. The more homogeneous the product in an industry, the further away we would expect to see competition (Spar and Yoffie 155). Another factor is transaction costs: the more difficult and time-consuming a transfer is, the less likely it is to occur. Stickiness is the resistance of a cost to change, despite changes in the broader economy, recommending an alternative cost is ideal. In general, this implies that the costs charged for specific goods and services are reluctant to change despite changes in input costs or demand patterns. Since most companies cannot freely change the location of plants like most, this will lead to considerable expenses resulting from cross-cutting and marginal moves. The higher these expenses, the stickier the investments will prove to be, which will evidently reduce the momentum towards the race to the bottom. These factors contribute greatly to differences in industry structure and incentives. Furthermore, there are also invisible costs such as hiring and training new employees, construction contracts, etc. The prerequisites must be met, e.g.,