In the retail coffee industry, the barriers to entry are low as anyone can rent a place and get an espresso machine to sell coffee. With many mom and pop coffee stores and retail coffee shows, the number of competitors in the industry is high. In such a case, most of the coffee houses use beans and other ingredients to create different blends of coffee but the end customers are not able to tell the difference; the product differentiation would be low. In addition, it would cost the customer nothing to switch from one brand to another resulting in low switching costs. For the retail coffee industry, in a scenario, many suppliers provide the beans required by these firms. Moreover, there is not a significant difference in the quality of the product from different suppliers. In addition, with many suppliers offering similar commodity-type products, the switching costs for the focal firms would be low. Referring to the second part of the above scenario, all of these mentioned factors combined will result in

a) high bargaining power of the suppliers
b) high threat of new entrants to the industry .
c) low threat of new entrants to the industry .
d) low bargaining power of the suppliers

Answer rating: 100% (QA)

Introduction The point if discussion here are the potential threat... View the full answer