Industry analysis can give firms an advantage when making decisions. This analysis helps managers determine the nature of the competition, the possible sources of imperfect competition, and the ________.
A) hierarchy of the firm's management system
B) possibility of the firm's earning above-normal returns
C) industries that would be compatible with the firm
D) number of firms in other industries

Question

Quizplus · Accepted Answer

Industry analysis can help a firm identify potential sources of above-normal returns, such as untapped markets or weaknesses in competitors. This information can give the firm a competitive advantage and guide strategic decisions. However, industry analysis alone cannot determine the hierarchy of the firm's management system, industries that would be compatible with the firm, or the number of firms in other industries.

Industry Analysis Can Give Firms an Advantage When Making Decisions