Internet technology:
A) makes it easy for rivals to compete on price alone.
B) imposes a significant cost of entry, due to infrastructure requirements.
C) increases the difference between competitors because of the wide availability of information.
D) makes it easy to sustain operational advantages.
E) has lessened competitive rivalries.

Question

Quizplus · Accepted Answer

Internet technology has made it easier for rivals to compete with each other on price because it has enabled consumers to compare prices more easily and has increased transparency in pricing. This has also led to increased price sensitivity among consumers, making it easier for competitors to enter the market with cheaper alternatives.

Answer: B
 While internet technology may have reduced some costs associated with conducting business, it has also increased the cost of entry into many markets due to infrastructure requirements. For example, companies looking to enter the internet service provider market must invest significant resources into building and maintaining their networks.

Answer: D
 Internet technology has made it easier to sustain operational advantages because it enables companies to automate many processes, reduce costs, and improve efficiency. This means that companies that can leverage internet technology effectively can generate sustainable operational advantages.

Answer: E
 It is not accurate to say that internet technology has lessened competitive rivalries. While it has made it easier for new players to enter the market and for existing players to sustain operational advantages, it has also increased transparency and price sensitivity, making competition more intense in some cases.

Internet Technology