Rivalry among competing sellers tends to be more intense when
A) competitors are very unequal in size and capability, such that small competitors must really scramble to even survive.
B) buyer switching costs are high and market demand is growing rapidly.
C) several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position.
D) the products of rival sellers are strongly differentiated.
E) there are fewer than 5 competitors and their products are strongly differentiated.

Question

Quizplus · Accepted Answer

When several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position, they are likely to engage in intense rivalry to gain an advantage. This is because they are all competing for the same pool of customers and resources, and any gains made by one competitor can come at the expense of others. High buyer switching costs and growing market demand (option B) could also fuel rivalry, but the question asks for the most intense rivalry, which is likely to occur when multiple competitors are all striving to improve their position. Option A is also a factor that can lead to intense rivalry, but it does not necessarily apply to all cases. Options D and E refer to product differentiation, which can impact rivalry, but it is not the primary driver of intensity.

Rivalry Among Competing Sellers Tends to Be More Intense When