Question

The competitive force of substitute products tends to be stronger when Group of answer choices buyers view the prices of substitutes as too high. the costs that buyers face in switching over to substitutes are low. the quality and performance of substitutes are relatively low. substitutes do not embody many characteristics that are similar to those of products already serving the market. none of the above.

Answer 1

Answer:

B. . the costs that buyers face in switching over to substitutes are low.

Explanation:

Porter's threat of substitutes assumes that there are alternative products which customers can easily switch to, to replace a particular product which might be dominant in the market. Some businesses tend to have a lot of competitors, unlike some that have monopoly of the market. Fast moving consumer goods like toiletries or beverages, fall into the class of businesses with many competitors.

There are several high risk factors that could prompt customers to chose a substitute. One of them is, if the prices of the substitutes are perceived by the customers as low. This would make them view the product as a better substitute. And if the product has similar or even higher quality, it makes the substitute more appealing.