During the strategic management lessons, a case will regularly be worked out. In this document you will find the notes of the US legal marijuana industry, streaming wars, DEME and Spadel case. The document contains 11 pages.
, Case: Pot of Gold? The US Legal Marijuana Industry
A question like this could be on the exam!
For venture capital investors, how attractive is the US marijuana industry as an investment destination?
Attractiveness of the average player?
An average player does not exist, but there are some relevant indicators
Average value captured by a player in the industry?
Draw the industry value system for Marijuana business in the US. (environment, industry value system)
Talk about a particular stage and look if this is an attractive business.
Industry Value System:
Comple
ments
Recreational Joe Weed
Cultivation
Suppliers Retail
Growing
Medical
Substitutes
Entry
Suppliers: equipment to supply the marijuana (e.g., greenhouse)
Entry: obtain a license
Rivals: tobacco, alcohol, people growing plants at home, illegal US marijuana industry
Substitutes: alcohol, cigarettes, home growers of a legal amount of plants
Intermediate buyers: marijuana growers, manufacturers (recreational or medical), retail
Customers: users
Complements: smoking equipment, tobacco, social environment, food
Porter’s 5 forces model:
- Rivalry among existing competitors
- Threat of new entrants
- Threat of substitutes
- Bargaining power of customers
- Bargaining power of suppliers
Competition for profits (value capture) goes beyond established rivals
The industry value chain (= rearrangement of the 5 forces + 1, the complements)
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