Wright Bank Corp. utilizes the janitorial services of Rob's Scrub-All Corp. to keep their buildings clean. Rob's provides all the necessary cleaning supplies, training, background security checks since the crew works after hours), and all other associated expenses. The other available janitorial services do not typically provide security checks, and a client such as a bank would have to hire guards to watch the work of the janitors. This expense effectively limits the bank to utilizing only Rob's services. Which of the following is being incurred by Wright Bank?

Question

Quizplus · Accepted Answer

Wright Bank is incurring high switching costs because they cannot easily switch to a different janitorial service due to the expense of hiring guards to watch the work of the janitors provided by other services.