The pharmaceutical industry is extremely dynamic.A company that releases a product to the general public with the intention of keeping prices high may see quick competition arising from other products made from different compounds that perform the same functions as the company's product.According to the five forces model, this type of threat is called
A)the level of rivalry among organizations in an industry.
B)the potential for entry into an industry.
C)the power of large suppliers.
D)the power of large customers.
E)the threat of substitute products.

Question

Quizplus · Accepted Answer

The threat of substitute products: When a substitute for a product exists, companies cannot demand high prices for it or customers will switch to the substitute, and this constraint keeps their profits low.

The Pharmaceutical Industry Is Extremely Dynamic