An industry faces a high threat from new entrants when
A) capital requirements for entry are large.
B) switching costs for industry customers are low.
C) economies of scale play an important role in the industry.
D) incumbents can be expected to retaliate heavily upon entry.

Question

Quizplus · Accepted Answer

When switching costs for industry customers are low, it is easier for new entrants to attract customers away from existing companies, increasing the threat of new entrants.

An Industry Faces a High Threat from New Entrants When