Asked by Seema AlHiraki on May 16, 2024

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Which of the following factors is LEAST likely to increase a rivalry between existing industry competitors?

A) high exit barriers
B) high industry growth
C) undifferentiated products
D) numerous competitors of equal size

High Exit Barriers

Factors that make it difficult and costly for a company to leave a market or industry.

Undifferentiated Products

Products that are essentially identical in features and quality to those offered by competitors, making differentiation through marketing crucial.

Industry Growth

The increase in production, sales, and the number of companies in a specific sector over time, indicating economic expansion and market potential.

  • Acquire knowledge on what drives competitive behavior and rivalries in various industries.
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Verified Answer

AA
AFRIDI AAHIL A 15BEI023May 17, 2024
Final Answer :
B
Explanation :
High industry growth is least likely to increase a rivalry between existing industry competitors because when an industry is experiencing high growth, there is enough demand for all existing competitors to thrive and grow, thereby reducing the intensity of rivalry between them. On the other hand, factors such as high exit barriers, undifferentiated products, and numerous competitors of equal size are more likely to increase a rivalry between competitors. High exit barriers make it difficult for firms to leave the industry, resulting in a higher level of rivalry as firms fight to survive. Undifferentiated products mean that firms are competing mainly on price, which can lead to a more aggressive rivalry. And when there are numerous competitors of equal size, competition is more intense as all firms try to gain market share.