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According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:
1. Rivalry among competing firms
2. Potential entry of new competitors
3. Potential development of substitute products
4. Bargaining power of suppliers
5. Bargaining power of consumers
Identify the force which is central (most powerful) to the remaining four.
- a)Potential development of substitute products
- b)Potential entry of new competitors
- c)Bargaining power of consumers
- d)Rivalry among competing firms
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
According to Porter, the nature of competitiveness in a given industr...
Rivalry among competing firms
Rivalry among competing firms is considered the central force among the five competitive forces identified by Porter. This is because intense competition between existing firms in an industry can directly impact the profitability and competitiveness of all players involved. Here's why it is considered the most powerful force:
Impact on pricing and profitability
- When there is high rivalry among competitors, firms may engage in price wars to gain market share, leading to lower prices and reduced profitability for all players.
- This intense competition can erode profit margins and make it challenging for firms to sustain growth and innovation.
Market share and differentiation
- Competing firms may invest heavily in marketing, product development, and other strategies to differentiate themselves from rivals and attract customers.
- This constant battle for market share and differentiation can lead to increased costs and reduced profitability.
Industry growth and consolidation
- In highly competitive industries, firms may struggle to grow and expand due to the intense rivalry.
- This can lead to industry consolidation as weaker players are forced out, leading to a more concentrated market with fewer competitors.
In conclusion, rivalry among competing firms is the central force among the five competitive forces identified by Porter because it directly impacts pricing, profitability, market share, differentiation, industry growth, and consolidation in a given industry.
Rivalry among competing firms is considered the central force among the five competitive forces identified by Porter. This is because intense competition between existing firms in an industry can directly impact the profitability and competitiveness of all players involved. Here's why it is considered the most powerful force:
Impact on pricing and profitability
- When there is high rivalry among competitors, firms may engage in price wars to gain market share, leading to lower prices and reduced profitability for all players.
- This intense competition can erode profit margins and make it challenging for firms to sustain growth and innovation.
Market share and differentiation
- Competing firms may invest heavily in marketing, product development, and other strategies to differentiate themselves from rivals and attract customers.
- This constant battle for market share and differentiation can lead to increased costs and reduced profitability.
Industry growth and consolidation
- In highly competitive industries, firms may struggle to grow and expand due to the intense rivalry.
- This can lead to industry consolidation as weaker players are forced out, leading to a more concentrated market with fewer competitors.
In conclusion, rivalry among competing firms is the central force among the five competitive forces identified by Porter because it directly impacts pricing, profitability, market share, differentiation, industry growth, and consolidation in a given industry.
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According to Porter, the nature of competitiveness in a given industr...
Porter's Five Forces is a model that identifies and analyses five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths.
Rivalry among competing firms is central (most powerful) to the remaining four because it is used to measure competition intensity, attractiveness, and profitability of an industry or market.
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According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? for CAT 2025 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer?.
According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? for CAT 2025 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer?.
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According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following five forces:1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumersIdentify the force which is central (most powerful) to the remaining four.a)Potential development of substitute productsb)Potential entry of new competitorsc)Bargaining power of consumersd)Rivalry among competing firmsCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CAT tests.
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