![]() That segment is more attractive which has high entry barriers and low exit barriers. There is variation in attractiveness of segment depending upon entry and exit barriers. Your key technology is not hard to acquire or isn’t protected well.Customers can easily switch (low switching cost).Capital requirements to start the business are less.Threat of new entry depends upon entry and exit barriers. In substitute industries, if competition rises or technology modernizes then prices and profits decline.Ī new entry of a competitor into your market also weakens your power. Profits and prices are effected by substitutes so, there is need to closely monitor price trends. ![]() When there are actual and potential substitute products available then segment is unattractive. So substitutes are a threat to your company. In the above mentioned situations, Customer can easily switch to substitute products. ![]() Substitute product is by a company earning high profits so can reduce prices to the lowest level.Quality of the competitors’ product is better.Customer can easily find the product or service that you’re offering at the same or less price.There are many substitute products available.Threat of substitute products means how easily your customers can switch to your competitors product. ![]()
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