Which of the following statements is true about rivalry in the context of established companies?
A) It significantly reduces the costs of established companies.
B) It squeezes profits out of an industry.
C) It enables companies to lower their spending on non-price-competitive strategies.
D) It forces companies to reduce prices when it is less intense.
E) It is unaffected by the demand conditions of an industry.

Question

Which of the following statements is true about rivalry in the context of established companies?
A) It significantly reduces the costs of established companies.
B) It squeezes profits out of an industry.
C) It enables companies to lower their spending on non-price-competitive strategies.
D) It forces companies to reduce prices when it is less intense.
E) It is unaffected by the demand conditions of an industry.

Quizplus · Accepted Answer

Rivalry among established companies typically leads to increased competition and price wars, which can ultimately lead to lower profits for all companies in the industry. This is because companies are forced to lower their prices to remain competitive, and may also increase their spending on marketing and other competitive strategies. Therefore, option B is the correct statement. The other options are incorrect because they either do not accurately describe the impact of rivalry on established companies or are unrelated to this concept.

Which of the Following Statements Is True About Rivalry in the Context