The competitive force of rival firms' jockeying for better market positions,higher sales and market shares,and competitive advantage
A) is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies.
B) is typically a weaker competitive force than is the threat of entry of new rivals.
C) is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive weapons to boost unit sales.
D) tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders.
E) is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buyers have moderate switching costs.

Question

Quizplus · Accepted Answer

When strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders, it tends to intensify the competitive force of rival firms jockeying for better market positions, higher sales, and market shares. This is because the entry of strong companies from outside the industry increases the level of competition and may result in a price war or other intense competitive actions. The other options are incorrect because: A is incorrect because when firms strive to be low-cost producers, they may engage in aggressive price cutting and other competitive actions that can intensify the competition. B is incorrect because the threat of entry of new rivals is only one of the five competitive forces identified by Porter. C is incorrect because industry conditions such as slow-growing buyer demand and moderate switching costs can affect the intensity of competitive rivalry among firms. E is incorrect because the presence of weakly differentiated products, slow-growing buyer demand, and moderate switching costs can increase the intensity of competitive rivalry among firms.

The Competitive Force of Rival Firms' Jockeying for Better Market