The likelihood of a competitive reaction to a firm's strategy is higher in an industry
A) that produces highly differentiated products
B) characterized by small order size
C) with non-standard operating procedures
D) that produces an homogenous product

Question

Quizplus · Accepted Answer

When an industry produces a homogenous product, firms compete primarily on price, making it easier for competitors to match or undercut a firm's strategy. In contrast, highly differentiated products, small order size, or non-standard operating procedures can create barriers to entry or make it more difficult for competitors to copy a firm's strategy. Therefore, the likelihood of a competitive reaction would be higher in an industry that produces a homogenous product.

The Likelihood of a Competitive Reaction to a Firm's Strategy