Answered: Assigning a weight to each measure of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Assigning a weight to each measure of competitive strength assessment is generally analytically superior
because
weighting each company's overall competitive strength by its percentage share of total industry profits produces a
more accurate measure of its true competitive strength.
○ it singles out which competitor has the most competitively potent core competencies.
○ All of the various measures of competitive strength are not equally important.
an unweighted ranking does not discriminate between companies with high and low market shares.
O a weighted ranking identifies which competitive advantages are most powerful.

Transcribed Image Text:The competitive battles among rival sellers striving for better market positions, higher sales and market shares, and competitive advantage suggest the rivalry force ○ is often weak when rivals have emotional stakes in business or face high exit barriers. ○ is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive weapons to boost unit sales. ○ tends to intensify when strong companies with sizable financial resources, proven competitive capabilities, and respected brand names hurdle entry barriers looking for growth opportunities and launch aggressive, well-funded moves to transform into strong market contenders. ○ is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies. ○ is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buyers have moderate switching costs.

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