Based on an analysis of the five forces that increase or decrease competitive pressures in an industry,in which of the following industries is profitability likely to be lowest?
A)Pizza restaurants
B)Wireless lighting systems
C)Delivery services using drones
D)Wearable fitness and health monitors
E)Pharmaceuticals

Question

Quizplus · Accepted Answer

The pizza restaurant industry is likely to have the lowest profitability given the intense competitive pressures from multiple forces. The bargaining power of suppliers is low in this industry since ingredients such as cheese, tomato sauce, and bread are widely available. However, the threat of new entrants is high since starting a pizza restaurant requires little capital investment and the industry is already saturated with many competitors. Additionally, the bargaining power of customers is high since there is little differentiation between pizza restaurants and customers have many options to choose from. Furthermore, the threat of substitutes is also high since customers can opt for other fast-food options such as sandwiches, burgers, or fried chicken. Finally, the intensity of rivalry is also high since there are many competitors with similar offerings fighting for the same customers. Therefore, due to these forces, profitability in the pizza restaurant industry is likely to be lower compared to the other industries listed.

Based on an Analysis of the Five Forces That Increase