Rivalry among competing firms tends to be more intense when
A) demand for the product is growing slowly,one or maybe several industry members become dissatisfied with their market position,buyers have low switching costs,and when strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to build market share.
B) the products/services of rival sellers are strongly differentiated,and buyer demand is strong.
C) rivals are relatively content with their market position.
D) there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members.
E) there are fewer firms in the industry that have unequal market shares.

Question

Quizplus · Accepted Answer

Rivalry among competing firms tends to be more intense when demand for the product is growing slowly, one or maybe several industry members become dissatisfied with their market position, buyers have low switching costs, and when strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to build market share. This creates a more competitive environment among existing firms. Option B is incorrect as strong differentiation of products and strong buyer demand could result in less intense rivalry. Option C is incorrect as relatively content rivals may not engage in intense competition. Option D is incorrect as the impact of one company's actions is spread thinly across many members, reducing the intensity of rivalry. Option E is also incorrect as fewer firms with unequal market shares may lead to a more stable market and less intense rivalry.

Rivalry Among Competing Firms Tends to Be More Intense When