Which of the following factors might prompt an organisation to procure an alternative product?

Which of the following factors might prompt an organisation to procure an alternative product?

Select THREE that apply:
A . Brand loyalty
B . Relative value to money between options
C . Buying organisation’s propensities to change
D . Easy access to distribution channel
E . Threat of retaliation
F . Switching cost

View Answer

Answer: B, C, F

Explanation:

According to Michael Porter, the threat of substitution, is a function of three factors:

• The relative value/ price of a substitute compared to an industry’s product

• The cost of switching to the substitute

• The buyer’s propensity to switch

(Porter, Michael E.. Competitive Advantage: Creating and Sustaining Superior Performance (p. 278). Free Press. Kindle Edition.)

Reference: CIPS study guide page 92-97

LO 2, AC 2.2