Lu runs a company that manufactures satellites for commercial and government use. It has few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Lu conclude?

Question

Quizplus · Accepted Answer

The stronger the forces (threat of entry, power of buyers and suppliers, and threat of substitutes) are, the stronger the expected competitive intensity, which in turn limits the industry's profit potential. Therefore, the weaker these forces are, the more profitable a firm in this industry is likely to be.

Lu Runs a Company That Manufactures Satellites for Commercial and Government