Question

True Home Inc., Super Cart Inc., and Daily Things Inc. are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Which of the following is an implication of the market condition indicated in this scenario?

a) High entry barriers
b) Low competitive rivalry
c) High threat of new entrants
d) Low product differentiation

Answer 1

The market condition indicated in the scenario suggests a low level of product differentiation.

Step-by-step explanation:

The market condition indicated in the scenario suggests a low product differentiation. When companies produce and distribute similar products using the same resources and capabilities, it means that their products are not significantly different from each other. In such a situation, customers have less reason to choose one company's product over another, resulting in a low level of product differentiation.