Generally, an industry is more attractive when companies in the industry have ________ switching costs to go from one supplier to another.
A)high
B)moderate
C)significant
D)low

Question

Quizplus · Accepted Answer

When the switching costs to go from one supplier to another are low, companies have the flexibility to easily change suppliers, which puts pressure on suppliers to offer competitive prices and better quality products/services. This makes the industry more attractive as buyers have more bargaining power and can negotiate better deals. Alternatively, when the switching costs are high, it becomes harder for buyers to change suppliers and they may end up sticking with their existing suppliers even if they are not offering the best products or services.

Generally, an Industry Is More Attractive When Companies in the Industry