Series 79 practice questioneasyPorter's Five Forces
Which of the following is considered a 'threat of substitutes' in Porter's Five Forces analysis for the beverage industry?
- ARising labor costs in manufacturing
- BMergers between bottling companies
- CConsumers switching from soda to bottled water✓ Correct answer
- DExclusive supply contracts
Explanation
Why C — Consumers switching from soda to bottled water
The threat of substitutes involves customers choosing alternative products, such as switching from soda to water. Mergers, labor costs, and supply contracts impact other aspects of industry structure but are not substitute threats.
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