If a firm operating in a fragmented industry can find a way to __________, the profit potential is high.
A) backwards integrate
B) consolidate the industry
C) change its generic strategy
D) diversify
E) change strategic groups

Question

Quizplus · Accepted Answer

Consolidating the industry by merging or acquiring smaller competitors can lead to increased market power and lower competition, allowing the firm to charge higher prices and increase profitability. Backwards integration, diversification or changing generic strategy might not necessarily address the issue of fragmentation and may not provide such high profit potential. Changing strategic groups may not be applicable in the context of a fragmented industry.

If a Firm Operating in a Fragmented Industry Can Find