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Question 10 - CPIM-Part-2 discussion

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Rivalry among competing sellers is generally weaker when:

A.
buyer demand is growing rapidly.
Answers
A.
buyer demand is growing rapidly.
B.
the products of rival sellers are commodities.
Answers
B.
the products of rival sellers are commodities.
C.
buyer costs to switch brands are low.
Answers
C.
buyer costs to switch brands are low.
D.
the number of rivals increases, and rivals are of roughly equal size and competitive capability.
Answers
D.
the number of rivals increases, and rivals are of roughly equal size and competitive capability.
Suggested answer: A

Explanation:

Rivalry among competing sellers is the degree of competition between firms in the same industry. It can affect the profitability and market share of the firms, and influence their strategies and decisions. Rivalry tends to be stronger when the demand is slow, the products are similar, the switching costs are low, and the capacity is high. Rivalry can also lead to innovation, differentiation, and customer satisfaction.

Rivalry among competing sellers is generally weaker when buyer demand is growing rapidly. This is because a fast-growing market offers more opportunities for expansion and growth for all the firms, without having to compete aggressively for a limited number of customers. A fast-growing market also reduces the pressure to cut prices or increase advertising, as the demand exceeds the supply. A fast-growing market can also attract new entrants, which can increase the rivalry in the long run, but in the short run, it can create more diversity and segmentation in the market.

asked 16/09/2024
Rik Ant
45 questions
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