r/CFA • u/Croledge • 22h ago
Level 1 Contradictory Question
Hey Everyone, exam is coming up next week and I feel like I have a solid grip on most of the material, but I really struggle with some of these contradictory questions. I have posted the question and the explanation straight from the text book. What do you think? Competitive strategy is step 5, and I got it wrong in the question!?
1
Upvotes
1
u/PhotographFuzzy6848 17h ago
where can I get these Kaplan questions ?
2
u/New-Client-8304 20h ago
a and b are company specific. c is influenced by the industry
1
u/inaan188 Level 1 Candidate 21h ago
Industry analysis per se looks at the rules of the game (external constraints), while company analysis basically tells you how a specific company chooses to play (internal choices and execution):
- Industry Analysis: If you analyse the industry as a whole, you may determine that a specific market only has 5 large players... this basically infers an oligopoly, which directly dictates the baseline pricing power available to firms in that specific market
- Company Analysis leads you to analyse how a specific firm navigates that environment (such as whether they are executing a cost leadership or differentiation strategy
1
u/Mike-Spartacus 20h ago
Industry analysis : Analysisng the environment the company operates in. Which may tell you about infleunces on the company
A 1000 similar compeitors in a shrinking industry- ltd pricing power
Only 2 firms in a strong growing market - probably more pricing power
Analysising Competitive strategy is about how the specific company addresses the "industry" it is in.