When an industry is subject to technological change,the ability of new entrants to displace incumbent firms will be increased if:

Question

Quizplus · Accepted Answer

Architectural innovations tend to disrupt the industry's status quo, requiring firms to change their overall architecture and business model. This makes it harder for incumbent firms to make the transition, giving new entrants an edge.

Answer: B
 A competence-enhancing technological change provides firms with new or improved abilities to compete, while competence-destroying technological changes weaken the firm's competitive position. Competence enhancing technologies tend to be more attractive to new entrants in a market.

Answer: C
 If incumbent firms are not focused on catering to the industry's largest customers, new entrants have an opportunity to develop relationships with those customers and gain a foothold in the industry.

Answer: D
 Geographical dispersion by incumbent firms can make it harder for new entrants to gain a foothold in the market as they need to establish a presence across dispersed areas. This can give the incumbent firms an advantage in retaining their market position.

When an Industry Is Subject to Technological Change,the Ability of New