Question

Competitive pressures stemming from substitute products are weaker when _____.

A. The substitutes are readily available and attractively priced
B. The substitutes offer unique and superior features
C. The switching costs to move from one product to another are low
D. The substitutes are produced by well-established competitors
E. Consumer preferences for the substitutes are strong

Answer 1

Competitive pressures from substitute products are weaker when the switching costs are high, deterring customers from changing to an alternative even if it's attractively priced or has better features.

Step-by-step explanation:

Competitive pressures from substitute products are weaker when the switching costs are high, deterring customers from changing to an alternative even if it's attractively priced or has better features.Competitive pressures stemming from substitute products are weaker when the cost to consumers to switch from one product to another is high. In scenarios where substitutes are readily available, priced attractively, offer unique features, produced by established competitors, or consumer preferences for them are strong, competitive pressures are typically intensified.

However, high switching costs can dissuade customers from moving to a substitute product even if it offers superior features or lower prices. These costs can include monetary costs, time, effort, or risks associated with switching. As such, high switching costs act as a barrier to competition and can help retain customers.