In the following question, I thought barriers to exit will make not many companies to enter into industry, thereby providing competitive advantage. What am I missing here? ------------------ All of the following are things that may create competitive advantage EXCEPT: A) barriers to entry. B) more efficient resource utilization. C) patents. D) barriers to exit. Your answer: B was incorrect. The correct answer was D) barriers to exit. Barriers to exit would not create a competitive advantage for a firm.
a, b, c provide sources of comp advantage. ur competitor having a barrier to exit does not create comp advantage for u right?
Think Harry Porter - VI D is a sureshot answer for this one.
Barriers to exit will not create a competitive advantage because it would give other competing companies to stay in the industry even despite years of losses. If Barriers to exit did not exist, companies that are making losses will just leave. But when there are barriers to exit, the company will choose to stay in the industry despite the losses due to the significant costs that they would incur (ie. firing costs) if they exit the industry.
Hey Dinesh - why HP4?? I did not get it… Are you talking about Dumbledore’s plans?
meant HP6…not 4. Are you talking about Dumbledore’s plans?
please dont tell me you meant Michael Porter!! Wish there were a HP 8 book to look forward to after this exam!!!
I was talking about Harry Potter and the Half Blood Prince and the mysterious book named “Competitive Advantage”, Porter, M.E. (1985) where Porter reveals his dark secrets. Do read it after 7th.
Potter -> D
… and I have stopped following Dumbledore’s plan after JK declared him g*y http://www.nytimes.com/2007/10/29/arts/29conn.html
I have read both the books… funny how Harry Potter sticks but Porter does not!
I’d rather he’d be gay than romance Minerva McGonagall!!!