Asked by Lupita Martinez on Sep 24, 2024
Verified
In the IO perspective it is important to enter an industry with
A) High barriers to entry
B) Differentiated products
C) Small number of competing firms of different sizes
D) All of the above
High Barriers
Refers to obstacles that prevent new competitors from easily entering an industry or area of business.
Differentiated Products
Products that are distinct from one another on the basis of quality, features, branding, etc., allowing businesses to target specific market segments.
Competing Firms
Businesses that operate in the same market and offer similar products or services to the same consumer base, often engaging in competition for market share.
- Recognize the influencers on a company's competitive edge within a sector as per the Industrial Organization outlook.
- Acquire knowledge on the subject of entry deterrents and their effect on competitive forces in a sector.
Verified Answer
PD
Paresh Dedhia4 days ago
Final Answer :
D
Explanation :
Entering an industry with high barriers to entry ensures that there are fewer new competitors who can enter the market easily, reducing the threat of new entrants. Producing differentiated products can help a firm stand out from its competitors and generate higher profits. Having a small number of competing firms of different sizes promotes healthy competition without creating a cut-throat environment. Thus, entering an industry with all of the above can be beneficial in the IO perspective.
Learning Objectives
- Recognize the influencers on a company's competitive edge within a sector as per the Industrial Organization outlook.
- Acquire knowledge on the subject of entry deterrents and their effect on competitive forces in a sector.