Is this an example of the threat of substitutes, one of the five forces of competition described by competitive forces theory?

A competitor develops an alternative type of vacuum cleaner to one produced by your organization.

Is this an example of the threat of substitutes, one of the five forces of competition described by competitive forces theory?
A . Yes, customers may switch to alternative products
B . Yes, there are no barriers to entry; it is an oligopoly
C . No, it does not serve the same purpose
D . No, it is a threat from a new entrant to the market

View Answer

Answer: A

Explanation:

Substitute products pose a competitive threat by offering alternative solutions to customers, potentially eroding market share. Effective differentiation and customer retention strategies are essential.