Competitive pressures associated with the threat of entry are greater when:
A) incumbent firms are unable or unwilling to strongly contest the entry of newcomers.
B) a large pool of potential entrants exists,some of which have the capabilities to overcome high entry barriers.
C) entry barriers are relatively low and buyer demand for the product is growing rapidly,and newcomers can expect to earn attractive profits without inviting a strong reaction from incumbents.
D) existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence.
E) All of these conditions heighten the competitive pressures associated with fresh entry into the industry.

Question

Quizplus · Accepted Answer

All of the conditions mentioned (incumbents unable or unwilling to contest entry, large pool of potential entrants, low entry barriers, growing buyer demand, incumbents looking to expand) increase competitive pressures associated with the threat of entry. When there are many potential entrants who see the opportunity for attractive profits, and there is little resistance from existing firms, competition will intensify.

Competitive Pressures Associated with the Threat of Entry Are Greater