Determining how strong the threat of substitutes will be entails
A)identifying the relative price/performance relationship of the substitutes, the switching costs, and the overall buyer demand for the substitute.
B)identifying the attractiveness of other industries.
C)measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling techniques.
D)adopting a substitute product concentration factor to the buyer volume.
E)judging whether industry members are capable of self-manufacturing their products.

Question

Quizplus · Accepted Answer

Determining the strength of substitute threat requires understanding the performance/price relationship of substitutes, switching costs, and buyer demand for them. These factors help assess how easily buyers can switch to substitute products instead of the industry's product. Other options, such as measuring a specific substitute's impact or considering industry's self-manufacturing capabilities, may be useful but not as critical as understanding the features mentioned in option A.

Determining How Strong the Threat of Substitutes Will Be Entails