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CFA Institute Exam CFA-Level-I Topic 1 Question 7 Discussion

Actual exam question for CFA Institute's CFA Level I Chartered Financial Analyst exam
Question #: 7
Topic #: 1
[All CFA Level I Chartered Financial Analyst Questions]

Daniel Tipton and Jesse Torrez are first-year MBA students at the Haas School of Business. Torrez has an economics background, but Tipton’s background is in music. To help Tipton study one of the main tenets of competition theory, Torrez creates the following question and asks Tipton to identify the statement that is most inconsistent with Porter’s five forces. Which statement should Tipton select?

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by Tomoko at Sep 13, 2024, 06:48 PM

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Ceola
13 days ago
Haha, I bet Tipton's music background is really helping him here. Maybe he should've chosen a different major if he wanted to ace this exam!
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Annabelle
5 hours ago
Tipton: I think I should go with option B.
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Dominga
17 days ago
D) Rivalry increases when firms of equal size compete within an industry. This is literally one of the key points of Porter's five forces, so it can't be the most inconsistent statement.
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Brande
4 days ago
A) Supplier power is higher when there are only a few suppliers to an industry.
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Melina
18 days ago
But doesn't Porter emphasize the importance of supplier power in his framework?
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Salome
19 days ago
I disagree, I believe option A is the most inconsistent with Porter's five forces.
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Melina
21 days ago
I think Tipton should select option B.
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Earleen
1 months ago
I think B) is the most inconsistent statement. Economies of scale are a key competitive advantage, not something that goes against Porter's framework.
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Rima
1 months ago
A) Supplier power is higher when there are only a few suppliers to an industry. This seems like the most inconsistent statement with Porter's five forces.
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Ernestine
7 days ago
It's important to understand these concepts for our MBA studies at Haas School of Business.
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Glendora
10 days ago
D) Rivalry increases when firms of equal size compete within an industry also fits with Porter's five forces.
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Layla
16 days ago
I agree, B) To sustain above average returns on invested capital, firms should strive for economies of scale, is more in line with Porter's theory.
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Joye
22 days ago
I think you're right, A) Supplier power is higher when there are only a few suppliers to an industry does not align with Porter's five forces.
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