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Basic Question 0 of 14
Which factor is important in analyzing the industry concentration issue?
B. The absolute market shares of all competitors
C. Both the relative and absolute market shares of all competitors
A. The relative market shares of all competitors
B. The absolute market shares of all competitors
C. Both the relative and absolute market shares of all competitors
User Contributed Comments 2
| User | Comment |
|---|---|
| cpurcell | isn't market share= firm sales over sales by all competitors, and therefore already 'relative'? |
| ascruggs92 | No, a market share of 10% means you generate 10% of the industries sales. Relative means compare you share to their share. examples: - I have 20% market share, but the other 80% is controlled equally by 2 companies. Therefore I am a relatively small player in this industry. - I have 20% market share, and the next largest competitor has 5%. Therefore I am a relatively big player in the industry. Both have 20% market share, but have different relative sizes |
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Learning Outcome Statements
describe the elements that need to be covered in a thorough industry analysis;
describe the principles of strategic analysis of an industry;
explain the effects of barriers to entry, industry concentration, industry capacity, and market share stability on pricing power and price competition;
describe industry life cycle models, classify an industry as to life cycle stage, and describe limitations of the life-cycle concept in forecasting industry performance;
CFA® 2024 Level I Curriculum, Volume 4, Module 40.