According to Bruce Henderson, competitive equilibrium is most likely to be stable when:
Answer(s): A
Bruce Henderson has analyzed firms' reaction patterns when confronted with competitive attacks. A key to the analysis is competitive equilibrium. When one competitor hasapproximately twice the market share of a second competitor, equilibrium exists. The costs of gaining market share outweigh the benefits to either party.
According to a model suggested by Arthur D Little, a consulting organization, market share will tend to
Answer(s): C
Arthur D Little suggests a three-factor model for assessing a competitor's current and future market share. Market share is the share of the target market. Mind share is the percentage of customers who name the firm as the first that comes to mind" in the industry. Heart share is the percentage of customers who name the firm as the one from which they "would prefer to buy." A competitor that improves its mind share and heart share will ultimately increase its market share and profits.
Firm X is considering entry into an industry. To analyze competition within the industry, Firm X evaluated its strategic groups. According to Michael E. Porter,
Answer(s): B
Intergroup competition is increased by market interdependence, which is the extent to which groups pursue the same customers. The greater the interdependence, the stronger the competition among groups.
According to a model developed by Arthur D Little, a firm with a better-than-average chance to improve its competitive position is in a
A firm in a favorable position has strengths that it can exploit. Thus, it has better-than average chance to improve its position but is not as well placed as a dominant or strong firm.
Monopolistic competition is characterized by
Monopolistic competition is characterized by a large number of firms offering differentiated products. Entry into the market is relatively easy, firms have some price control, and substantial non price competition exists, such as advertising.
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