Asked by calliegh damlow on Sep 24, 2024
Verified
In the IO perspective,it is important to enter an industry with
A) High barriers to entry
B) Low buyer power
C) Low supplier power
D) All of the above
High Barriers
Significant obstacles or challenges that prevent or hinder entry into a market or the successful completion of a task.
Low Buyer Power
A market condition where buyers have limited influence over prices or terms due to high supplier concentration or the lack of alternatives.
Low Supplier Power
Refers to a market condition where suppliers have little control over the pricing and terms of sales, giving buyers greater bargaining power.
- Diagnose the components that contribute to a firm’s competitive capacity in its industry, following the Industrial Organization analysis.
- Grasp the concept of barriers to entry and how they affect the competition in an industry.
Verified Answer
WZ
WENXUAN ZHANG3 days ago
Final Answer :
D
Explanation :
From an Industrial Organization (IO) perspective, entering an industry is more advantageous when there are high barriers to entry, low buyer power, and low supplier power. High barriers to entry reduce the threat of new entrants, low buyer power decreases the ability of buyers to demand lower prices, and low supplier power limits the ability of suppliers to demand higher prices, all of which can improve a firm's competitive position and profitability.
Learning Objectives
- Diagnose the components that contribute to a firm’s competitive capacity in its industry, following the Industrial Organization analysis.
- Grasp the concept of barriers to entry and how they affect the competition in an industry.