Which of the following statements is true of direct competition?
A) It is determined by market commonality and resource similarity.
B) It encourages the production of perfectly imitable resources.
C) It uses cost leadership to produce a specialized product for limited customers.
D) It minimizes the effects of industry competition.

Question

Quizplus · Accepted Answer

Direct competition is determined by market commonality and resource similarity. Market commonality refers to the degree to which two or more companies have overlapping target markets, while resource similarity refers to the extent to which their tangible and intangible resources are comparable. Direct competition is characterized by firms competing for the same customers in the same market with similar resources.

Which of the Following Statements Is True of Direct Competition