Asked by sreeja reddy on Sep 24, 2024
Verified
In the IO perspective it is important to enter an industry with
A) Low supplier power
B) Low threat from substitutes
C) Low levels of rivalry between firms
D) All of the above
Low Supplier Power
Refers to a market condition where suppliers have limited control over the price and terms of products and services due to high competition or low demand.
Threat from Substitutes
The potential for consumers to switch to alternative products that fulfill the same need, affecting demand.
Levels of Rivalry
Levels of rivalry refer to the intensity and number of competitors in a market or industry, impacting the competitive dynamics and strategy decisions of firms.
- Pinpoint the factors determining a business's competitiveness in a marketplace according to the Industrial Organization approach.
- Comprehend the notion of obstacles to market entry and their influence on industry rivalry.
Verified Answer
BK
Bá Khánh Linh Nguy?n4 days ago
Final Answer :
D
Explanation :
It is important to enter an industry with low supplier power, low threat from substitutes, and low levels of rivalry between firms because these factors can affect a firm's ability to compete and be profitable in the industry. Low supplier power means that the firm can negotiate better prices for inputs, low threat from substitutes means that the firm's products are unique and not easily replaced by other products, and low levels of rivalry between firms means that there is less competition for customers and market share. All of these factors can contribute to a firm's success in the industry.
Learning Objectives
- Pinpoint the factors determining a business's competitiveness in a marketplace according to the Industrial Organization approach.
- Comprehend the notion of obstacles to market entry and their influence on industry rivalry.