The competitive pressures from substitute products tend to be stronger when
A)buyers are relatively comfortable with the quality and performance of substitutes,and the costs to buyers of switching over to the substitutes are low.
B)there are more than 10 sellers of substitute products.
C)substitutes exhibit the latest in technological innovation.
D)buyers have high psychic costs in severing existing brand relationships and establishing new ones.
E)demand for the industry's product is not very price sensitive.

Question

Quizplus · Accepted Answer

When buyers are satisfied with the quality and performance of substitutes, and switching costs are low, they are more likely to switch to the substitutes, leading to stronger competitive pressures. This is because these conditions make it easier for buyers to switch to substitutes, reducing their loyalty to the industry's products.

The Competitive Pressures from Substitute Products Tend to Be Stronger