Asked by Dionny Ancheta on Sep 24, 2024
Verified
In the IO perspective it is important to enter an industry with
A) High supplier power
B) Low threat from substitutes
C) Low levels of rivalry between firms
D) Only B & C
High Supplier Power
A market condition where suppliers have significant influence over the market price and terms of products because of the lack of competition or alternatives.
Threat from Substitutes
The risk that alternative products or services may satisfy the same customer needs, potentially reducing demand for the current product.
Levels of Rivalry
Refers to the intensity of competition between firms in a market, ranging from monopolistic to perfectly competitive scenarios.
- Ascertain the determinants impacting a firm's competitive standing in an industry from the Industrial Organization perspective.
- Understand the idea of entry barriers and their impact on competitive dynamics within a market.
Verified Answer
OH
Osama Hassan3 days ago
Final Answer :
D
Explanation :
In the IO perspective, it is important to enter an industry with low threat from substitutes and low levels of rivalry between firms. This allows for greater possibility of profitability and success in the long term. High supplier power can lead to increased costs and dependency, which may not be ideal for a new entrant in the industry. Therefore, the best choice would be only B & C.
Learning Objectives
- Ascertain the determinants impacting a firm's competitive standing in an industry from the Industrial Organization perspective.
- Understand the idea of entry barriers and their impact on competitive dynamics within a market.