Rivalry among competing sellers increases when

Multiple Choice

• buyer demand is growing slowly or declining.
• the rivals face low exit barriers.
• buyer costs to switch brands are high.
• the firms in the industry have low fixed costs.
• the firms in the industry have low storage costs.

Tanisha, the owner of a local fitness gym, has asked you to explain the five forces model of industry attractiveness to her. What would you advise her to eliminate from her consideration of the five forces in the fitness industry?

Multiple Choice

• competitive pressures from changes in local and state laws governing employment practices and minimum wages
• competitive pressures from the relative bargaining power of suppliers to the fitness industry
• competitive pressures from the providers of at-home fitness workouts and equipment
• competitive pressures from the relative bargaining power of buyers of gym memberships
• competitive pressures from the threat of new rivals entering the fitness industry

The competitive pressures from potential new entrants tend to be weaker when

Multiple Choice

• there is a large pool of potential entrants, some of which have the capabilities to overcome high entry barriers.
• buyer demand is growing rapidly.
• newcomers can expect to earn attractive profits.
• industry members are willing and able to contest new entries.
• existing industry members hope to expand their market reach by entering product segments or geographic areas where they do not have a presence.

Whether buyers are able to exert strong competitive pressures on industry members depends on

Multiple Choice

• (1) the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and (2) whether strategic partnerships between certain industry members can adversely affect other industry members.
• (1) how much buyer preferences vary within the industry and (2) whether industry members are spending more or less on advertising.
• (1) the degree to which buyers have bargaining power and (2) how much buyer preferences vary within the industry.
• (1) the degree to which buyers have bargaining power and (2) the extent to which buyers are price-sensitive.
• (1) the extent to which buyers are price-sensitive and (2) the competitiveness of the market.

Geraldine, the COO of a gourmet food truck business that specializes in Spanish cuisine such as paella and tapas, has been asked to present her company with an evaluation of strong prospects for attractive profits. What would she normally not include in her analysis?

Multiple Choice

• whether or not the food truck industry is impacted by changes in the macro-environment
• whether or not the company occupies a stronger market position than rivals
• whether or not food truck industry profitability will be impacted by the prevailing driving forces
• whether or not the food truck industry's opportunities for international expansion are promising
• whether or not her gourmet food truck company can deliver on the industry's key success factors