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CMA Intermediate · Operations Management and Strategic Management · Strategic Analysis and Strategic Planning

Intense rivalry among existing competitors in an industry is LEAST likely when:

Rivalry is least likely when the industry grows fast and products are differentiated with high switching costs. Firms can grow without taking share from each other and customers are less price sensitive. Slow growth, high exit barriers and many equal competitors all intensify rivalry.

  1. AIndustry growth is slow and firms fight for market share
  2. BExit barriers are high because of specialised assets
  3. CCompetitors are numerous and roughly equal in size
  4. DThe industry is growing fast and products are differentiated with high switching costsCorrect

Explanation

Fast growth lets firms expand without taking share from rivals, and differentiation with high switching costs reduces price competition. Slow growth, high exit barriers that keep weak firms in, and many equally sized rivals all intensify rivalry.

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