Question

New entrants to an industry are more likely to appear when

Answer 1

Answer:

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Threat of New Entrants Definition. In Porters five forces, threat of new entrants refers to the threat new competitors pose to existing competitors in an industry. ... More competition – or increased production capacity without concurrent increase in consumer demand – means less profit to go around.

Answer 2

The question was incomplete. Here is the full question:

New entrants to an industry are more likely when-

A. it is difficult to gain access to distribution channels.

B. economies of scale in the industry are high.

C. product differentiation in the industry is low.

D. capital requirements in the industry are high.

Answer:

New entrants to an industry are more likely to appear when product differentiation in the industry is low.

Explanation:

• Businesses who are new to your market are new entrants. When there are limited economies of scale, no knowledge intensity, low entry costs, and no protection of critical technologies, new competitors can readily enter your market.
• The risk that a new competitor poses for existing businesses in a given industry is known as the threat of new entrants. When a new business starts offering a comparable good or service to an established business, this happens.
• The main goal of product differentiation is to persuade customers to pick one brand or product over another in a crowded market of rivals. It identifies the characteristics that distinguish one product from another that are similar and makes use of those distinctions to influence consumer decision.

Thus the answer is Option C.

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