BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rivalry increases when:
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buyer demand is increasing.
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when there is excess supply of unused production capacity.
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as the products of rival sellers become more strongly differentiated.
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all of these.
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Explanation:
Detailed explanation-1: -If the industry’s fixed costs are high, then competitive rivalry will be intense. Additionally, rivalry will be intense if the industry’s products are undifferentiated or are commodities. If brand loyalty is insignificant and consumer switching costs are low, then this will intensify industry rivalry.
Detailed explanation-2: -4) When there is excess supply or unused production capacity, especially if the industry’s product has high fixed costs or high storage costs-When oversupply exists, companies must cut costs to ensure they sell everything.
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