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In the luxury cruise industry, the small cruise lines Tropics Inc. and Sunset Inc. merged to form TropicalSunset Inc. After the merge, the competition between TropicalSunset Inc. and the two mega cruise lines, Pacifico and West Winds, has increased significantly. Which of the following statements best explains why this happened?

1. Competition always increases if there are only two or three mega firms competing.
2. Competitive rivalry is strongest between firms that are within the same strategic group.
3. Competition always increases when two small firms merge into a mega firm
4. Competitive rivalry is strongest between firms that service the same region

Respuesta :

TomShelby

Answer:

2. Competitive rivalry is strongest between firms that are within the same strategic group.

Explanation:

Now, the new company is in the same strategic group (grand companies) than Pacifico and West Winds thus, they feel threatened by them. Before they were small firm so it wasn't profitable to make competitionagainst a small portion of the market. As tehe cut of the new company is bigger enough to justify this, these company's start to go into the market share of Tropical Sunset.

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