Answer:
Avoid niche markets with high competition or low demand, as these dynamics can make it difficult to achieve sustainable profits. High competition leads to price wars, while low demand indicates insufficient customers to support new businesses.
Step-by-step explanation:
When choosing which niche market to avoid, one should primarily consider market dynamics that can hinder profitability and sustainability. A market with high competition can rapidly erode profits, as competitors strive to attract customers through price cuts or improved offerings, making it difficult for new entrants to gain a foothold. Additionally, a market with low demand signifies a limited customer base, which may not sustain a new business or justify the investment. Despite the attractive notion of high profit potential, markets with strong customer loyalty signal significant barriers to entry for new competitors, as established brands with a strong reputation can deter consumers from switching to a new provider.