BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Highest in a market place producing premium brand products.
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Highest in a market place producing highly innovative, differentiated, market leading products.
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Highest in a market place producing high price, undifferentiated products.
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Highest in a market place producing high use, low cost products.
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Detailed explanation-1: -According to Porter, Rivalry among competing firms is usually the most powerful of the five competitive forces.
Detailed explanation-2: -Answer and Explanation: The correct answer is C) Threat of new entrants. This threat is eliminated when the barriers are high and potential competition cannot enter the market. As such, it is the most closely associated with this concept.
Detailed explanation-3: -A low threat of new entrants makes an industry attractive – there are high barriers to entry. Therefore, existing companies are able to enjoy increased profit potential. A high threat of new entrants makes an industry less attractive – there are low barriers to entry.
Detailed explanation-4: -These forces include the number and power of a company’s competitive rivals, potential new market entrants, suppliers, customers, and substitute products that influence a company’s profitability. Five Forces analysis can be used to guide business strategy to increase competitive advantage.