The competitive environment is defined by the number and size of competitors
The competitive environment is influenced by how easy it is for new companies to enter the market.
What does the degree of differentiation measure in the competitive environment?
Product uniqueness
Barriers to exit refer to the difficulty for companies to leave the market
Match the competitive structure with its definition:
Perfect Competition ↔️ Many firms with identical products
Monopolistic Competition ↔️ Many firms with differentiated products
Oligopoly ↔️ Few firms dominate the market
Monopoly ↔️ One firm controls the market
Perfect competition includes free entry and exit for firms.
What characterizes an oligopoly in terms of market dominance?
Few large firms
A monopoly is characterized by a single seller and very high barriers to entry
What is the purpose of Porter's Five Forces framework?
Analyze competitive forces
Order the five forces in Porter's framework:
1️⃣ Threat of New Entrants
2️⃣ Bargaining Power of Suppliers
3️⃣ Bargaining Power of Buyers
4️⃣ Threat of Substitute Products
5️⃣ Intensity of Competitive Rivalry
Which industry has a low threat of new entrants due to high capital investment requirements?
Aviation
Rare earth metal suppliers have high bargaining power due to their concentration.
Large supermarket chains have high bargaining power when purchasing from small suppliers
What is an example of a substitute product that threatens traditional cable TV?
Streaming services
In which industry is competitive rivalry most intense between Apple and Samsung?
Smartphone
Understanding Porter's Five Forces helps businesses improve their market position and profitability.
Monopolistic competition involves many firms competing with differentiated products.
Oligopolies have low barriers to entry.
False
What type of competitive structure involves a single seller with very high barriers to entry?
Monopoly
The factors defining competitive structures include the number and size of competitors, ease of entry, and degree of differentiation.
Arrange Porter's Five Forces in the order they appear in the study material.
1️⃣ Threat of New Entrants
2️⃣ Bargaining Power of Suppliers
3️⃣ Bargaining Power of Buyers
4️⃣ Threat of Substitute Products
5️⃣ Intensity of Competitive Rivalry
What does the "Threat of New Entrants" in Porter's Five Forces refer to?
Ease or difficulty of entry
An example of high bargaining power of suppliers is rare earth metal suppliers in technology manufacturing.
Large supermarket chains have high bargaining power over small suppliers.
What is the "Threat of Substitute Products or Services" in Porter's Five Forces?
Likelihood customers switch alternatives
Match the type of competitive advantage with its definition.
Cost Advantage ↔️ Lower cost than competitors
Product Differentiation ↔️ Unique products valued by customers
Service Excellence ↔️ Exceptional customer satisfaction
A cost leadership strategy aims to become the lowest-cost producer.
What is the first stage of market evolution?
Introduction
Arrange the stages of market evolution in the correct order.
1️⃣ Introduction
2️⃣ Growth
3️⃣ Maturity
4️⃣ Decline
The smartphone industry is currently in the decline stage of market evolution.
False
The competitive environment is defined by factors such as the number and size of competitors, ease of entry, degree of differentiation, and barriers to exit.
How many main types of competitive structures are there?
Four
In perfect competition, firms produce identical products.
Monopolistic competition has low barriers to entry.
What is a key feature of an oligopoly?
Few large firms
A monopoly is characterized by a single seller.
Match the competitive structure with its key feature: