Discuss APICS CPIM-Part-2 Exam Topic 4 Question 40

Rivalry among competing sellers is generally weaker when:

Abuyer demand is growing rapidly.

Bthe products of rival sellers are commodities.

Cbuyer costs to switch brands are low.

Dthe number of rivals increases, and rivals are of roughly equal size and competitive capability.

Suggested Answer: A

Rivalry among competing sellers is the degree of competition between firms in the same industry. It can affect the profitability and market share of the firms, and influence their strategies and decisions. Rivalry tends to be stronger when the demand is slow, the products are similar, the switching costs are low, and the capacity is high. Rivalry can also lead to innovation, differentiation, and customer satisfaction.

Rivalry among competing sellers is generally weaker when buyer demand is growing rapidly. This is because a fast-growing market offers more opportunities for expansion and growth for all the firms, without having to compete aggressively for a limited number of customers. A fast-growing market also reduces the pressure to cut prices or increase advertising, as the demand exceeds the supply. A fast-growing market can also attract new entrants, which can increase the rivalry in the long run, but in the short run, it can create more diversity and segmentation in the market.

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30 comments · newest first

German 10 months ago

I think A and C are the strongest reasons here.

Leonida 10 months ago

Wait, really? D seems like it would increase rivalry, not weaken it.

Paulina 10 months ago

I disagree, B makes sense too since commodities are interchangeable.

Meghann 10 months ago

C is a big factor, low switching costs can spark competition.

Velda 11 months ago

A is definitely true, more demand means less rivalry.

Tanesha 11 months ago

I recall discussing how having more rivals of equal size could actually intensify competition, so I’m hesitant about option D. It seems counterintuitive to me.

Lamonica 11 months ago

I feel like option C could also be a factor. If switching costs are low, buyers might just jump to a competitor, increasing rivalry. But I guess that could go both ways.

Marisha 11 months ago

I'm not so sure about that. I remember a practice question where commodities led to intense competition, which makes me lean towards option B instead.

Annelle 12 months ago

I think rivalry is weaker when buyer demand is growing rapidly, like in option A. It makes sense that sellers would focus more on meeting demand than competing with each other.

Annmarie 12 months ago

Rivalry is generally weaker when the market is more fragmented, with a larger number of similarly-sized competitors. That's the option that stands out to me the most. I'll focus on that as I evaluate the other choices.

Andra 12 months ago

Okay, I think I've got this. The key is to identify the conditions that would lead to less intense competition between sellers. Rapid demand growth, commodity products, and low switching costs for buyers - those seem like the most relevant factors here.

Lilli 1 year ago

Hmm, I'm a bit unsure about this one. I'll need to think through the different options and how they relate to the concept of weaker rivalry. Maybe I can eliminate some of the choices first.

Elliot 1 year ago

This question seems straightforward. I'll focus on the key factors that can weaken rivalry among sellers, like commodity products, low switching costs, and a large number of equally-sized competitors.

Velda 1 year ago

A is wrong, growing demand usually means more companies jumping in to compete for a piece of the pie.

Kallie 1 year ago

Haha, I bet the exam writers spent hours trying to come up with these tricky options. Gotta love economics!

Kina 1 year ago

↳ replying to Kallie

C) buyer costs to switch brands are low.

Stevie 1 year ago

↳ replying to Kallie

B) the products of rival sellers are commodities.

Sina 1 year ago

↳ replying to Kallie

A) buyer demand is growing rapidly.

Wynell 1 year ago

I think the answer is D, when the number of rivals increases and they are of equal size and capability.

Ressie 1 year ago

I see your point, but I think it's actually when buyer costs to switch brands are low.

Reuben 1 year ago

D sounds right to me. More rivals of equal size means they'll be fighting over the same cusReubeners.

Francesco 1 year ago

↳ replying to Reuben

C) buyer costs to switch brands are low.

Haydee 1 year ago

↳ replying to Reuben

A) buyer demand is growing rapidly.

Catalina 1 year ago

I disagree, I believe it's weaker when the products of rival sellers are commodities.

Titus 1 year ago

I think the answer is B. Commodity products means less competition, so rivalry is weaker.

Hobert 1 year ago

↳ replying to Titus

C) buyer costs to switch brands are low.

Arlen 1 year ago

↳ replying to Titus

Yes, that's correct. Commodity products usually have less differentiation, leading to weaker rivalry.

Isidra 1 year ago

↳ replying to Titus

B) the products of rival sellers are commodities.

Bettina 1 year ago

↳ replying to Titus

A) buyer demand is growing rapidly.

Tresa 1 year ago

I think rivalry is weaker when buyer demand is growing rapidly.

APICS CPIM-Part-2 Exam - Topic 4 Question 40 Discussion