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Department
Business
Course
BU111
Professor
Sofy Carayannopoulos
Semester
Fall

Description
What determines the power of substitutes in the Porter’s five forces mode, what effect do substitutes have on profitability and what can a firm do to address this force (4 marks)? The factors that determine the ppower of substitutes are - Number of quality substitutes (higher number = higher power) (0.5) - And the ease of switching to them (lower switching costs = higher power) (0.5) IM pct on profibtability - As the price of substitues goes down compared to your pdocuct and it ecomes easier to switch/switching costs decline, the greater the pressure you face to keep your price down/puts ceiling on your price (1) To address the force of substitutes - Convince customers that your produt is unique and thus can’t be substituted (1) - Lock customer in so that it is harder/more costly for the to switch (1) Explain how the elements that make the entrepreneurial process successful are smilar to/related to the Diamond E (3 ma
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