Question

A company that recently lost patent protection for a product may see an increased threat from which​ forces? g

Answer 1

Answer:

• Threat of Substitutes
• Threat of New entrants/ Competitors

Explanation:

This question relates to Porter's five forces.

A patent on a good protects that good from being able to be copied or produced by other companies.

Should a company lose this protection, companies will be allowed to make substitutes to the products without running afoul of the law. The company will therefore face an increased threat from Substitutes.

Other companies will also be able to produce the goods or offer the services now which would mean that new entrants/ competitors can come into the market for that good or service.