In competitive markets, the competitive force of substitute products is strong when:

• A. the cost of switching to substitutes is very high
• B. the substitutes are readily available and attractively priced
• C. the substitutes are difficult to obtain and expensive
• D. consumers have strong brand loyalty to the existing product

Answer: (B)

Verified step by step guidance

1. Understand the concept of substitute products in competitive markets: substitutes are alternative products that consumers can switch to if the price or quality of the original product changes.
2. Recognize that the competitive force of substitutes is stronger when consumers can easily switch from one product to another without incurring high costs or inconvenience.
3. Analyze the impact of switching costs: if the cost of switching to substitutes is very high, consumers are less likely to switch, so the competitive force is weaker.
4. Consider availability and pricing: when substitutes are readily available and attractively priced, consumers have more incentive and ability to switch, increasing the competitive pressure on the original product.
5. Evaluate brand loyalty: strong brand loyalty reduces the likelihood of consumers switching to substitutes, thus weakening the competitive force of substitutes.