The force from the five forces model that considers economies of scale, initial capital requirements, cost advantages relevant to company size, and lack of brand loyalty is the ________.
A)bargaining power of suppliers
B)threat of new entrants
C)threat of substitute products or services
D)rivalry among companies competing

Question

Quizplus · Accepted Answer

The force described in the question is the threat of new entrants. Economies of scale, initial capital requirements, and cost advantages are all factors that create barriers to entry and make it difficult for new companies to successfully enter the market. Additionally, the lack of brand loyalty among customers means that new entrants may not face the same obstacles in terms of customer loyalty as established companies. Therefore, the threat of new entrants is high when these factors are present.

The Force from the Five Forces Model That Considers Economies