The intensity of industry competition and an industry's profit potential are a function of which of the following forces of competition?:

Question

Quizplus · Accepted Answer

The intensity of industry competition and an industry's profit potential are determined by various factors, but the threat of new entrants is a significant force of competition. When new players enter the market, it increases the competition, leading to lower profit margins for existing players. This is because new entrants may have different business models, lower prices, better technologies or marketing strategies, which can disrupt the existing market dynamics. Therefore, the intensity of industry competition and profit potential are directly impacted by the threat of new entrants. The power of stockholders, employees, and global economic conditions are not necessarily related to industry competition and profit potential.

The Intensity of Industry Competition and an Industry's Profit Potential