Asked by Kaitlyn Foley on May 16, 2024
Verified
A variety of factors relating to industry structure affect the performance of the firm, including
A) threat of entry.
B) rivalry between existing competitors.
C) the state of the economy.
D) threat of entry and the state of the economy.
E) threat of entry and rivalry between existing competitors.
Industry Structure
The organizational composition and competitive dynamics of an industry, including the number and size of companies, entry barriers, and the extent of rivalry.
Threat of Entry
In business, it refers to the potential for new competitors to enter a market and disrupt existing players, impacting profitability.
Existing Competitors
Companies or entities that currently operate in the same market or industry as the subject company, offering similar products or services.
- Scrutinize the characteristics and impediments encountered by firms at varying stages of the industry life cycle.
- Review the operational performance of different sectors by utilizing return on equity (ROE) and supplementary financial metrics.
Verified Answer
MC
Mitzy CuevasMay 20, 2024
Final Answer :
E
Explanation :
Threat of entry and rivalry between existing competitors are key components of Porter's Five Forces model, which outlines how industry structure affects competitive strategy and firm performance. The state of the economy, while important, is an external factor not specific to industry structure.
Learning Objectives
- Scrutinize the characteristics and impediments encountered by firms at varying stages of the industry life cycle.
- Review the operational performance of different sectors by utilizing return on equity (ROE) and supplementary financial metrics.