Which of the following factors is LEAST likely to increase a rivalry between existing industry competitors?
A) high exit barriers
B) high industry growth
C) undifferentiated products
D) numerous competitors of equal size

Question

Quizplus · Accepted Answer

High industry growth is least likely to increase a rivalry between existing industry competitors because when an industry is experiencing high growth, there is enough demand for all existing competitors to thrive and grow, thereby reducing the intensity of rivalry between them. On the other hand, factors such as high exit barriers, undifferentiated products, and numerous competitors of equal size are more likely to increase a rivalry between competitors. High exit barriers make it difficult for firms to leave the industry, resulting in a higher level of rivalry as firms fight to survive. Undifferentiated products mean that firms are competing mainly on price, which can lead to a more aggressive rivalry. And when there are numerous competitors of equal size, competition is more intense as all firms try to gain market share.

Which of the Following Factors Is LEAST Likely to Increase