In the context of Porter's five industry forces, the threat of new entrants can be defined as:
A) a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry.
B) a measure of the intensity of competitive behavior among companies in an industry.
C) a measure of the ease with which customers can find substitutes for an industry's products or services.
D) a measure of the influence that customers have on the firm's prices.

Question

Quizplus · Accepted Answer

Threat of new entrants refers to the extent to which barriers to entry make it easy or difficult for new companies to enter the industry. These barriers may include economies of scale, government regulations, high capital requirements, and brand differentiation, among others. The higher the barriers to entry, the lower the threat of new entrants in the industry, and vice versa.

In the Context of Porter's Five Industry Forces, the Threat