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Introduction

AEP Industries Inc. (AEPI) is a manufacturer of plastic packaging films. It manufactures and markets a diverse line of polyethylene and PVC products. Its products are mainly used in packaging, transportation, beverage, food, automotive, pharmaceutical, chemical, electronics, construction, agriculture and textile industries. It conducts most of its operations in North America.

Business economics

1. Poor long-term profitability

a. Highly competitive industry

The industry that AEPI operates is highly competitive due to low switching costs and low entry barriers.

Due to the commoditized nature of the products in the industry, customers are often able to switch from one supplier to the other rather easily.

Low switching costs also helps in lowering entry barriers as new entrants require lesser...

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