Question

The pharmaceutical industry is extremely dynamic. A company that releases a product to the general public with the intention of keeping prices high may see quick competition arising from other products made from different compounds that perform the same functions as the company's product. According to the five forces model, this type of threat is called _____.A. the level of rivalry among organizations in an industryB. the potential for entry into an industryC. the power of large suppliersD. the power of large customersE. the threat of substitute products

Answer 1

Answer:

E. the threat of substitute products

Explanation:

A common reason for facing competition is when a company's product has a close substitute.

Substitute products in this case refers to products that can be used in place for another. A popular example is Coca-cola and Pepsi, Tea and coffee. Both of these products could can satisfy the same need. For instance an individual can choose to have Pepsi over Coca-Cola.

This type of threat may affect the company because of compounds that perform the same functions as the company's product.