The threat of competitors’ entering a market is very high in industries that perform a(n) _____ role and in industries where the primary product or service is _____.

Question

BlackTom AI · Accepted Answer

Intermediation — acting as a middleman that connects buyers and sellers — is especially susceptible to new entrants, and digital primary products amplify that susceptibility.

1) Relevant concepts:
- Intermediation: firms that add value by connecting parties (brokers, agents, marketplaces).
- Disintermediation: removal of intermediaries when technology enables direct producer–consumer links.
- Digital products: goods or services delivered electronically (software, platforms, content) with low marginal cost, easy replication, and global distribution.
- Barriers to entry: factors (capital, regulation, distribution) that deter new competitors.

2) Step-by-step reasoning:
- Step 1: Intermediaries depend on being the necessary connector; if technology enables direct matching (e.g., a platform or app), that role can be bypassed. New entrants can create improved matching algorithms or interfaces and rapidly attract users.
- Step 2: Digital products have near-zero marginal cost and require little inventory or physical distribution, so entrants need less capital to start. This lowers barriers to entry.
- Step 3: Low switching costs for digital services and rapid scalability mean an entrant can quickly gain critical mass; network effects can help or hurt incumbents but do not prevent entry.
- Step 4: Combining intermediation with digital delivery means both the role (middleman) and the product type (easily replicated/ delivered) favor many potential entrants.

3) Intermediate “calculations” (logical):
- Barrier estimate: Physical product requiring manufacturing/distribution ≫ Digital product requiring code and cloud hosting. Hence entry difficulty: physical > digital.
- Role vulnerability: Pure intermediary (no proprietary asset) > Firm with proprietary product. So threat of entry is highest when role = intermediary and product = digital.

4) Why the correct answer is correct:
- Intermediaries with digital offerings face low-cost, fast-moving challengers and can be disintermediated; therefore the threat of new entrants is very high.

5) Why other options are incorrect:
- "Intermediation, physical" or "broker, physical": physical products entail higher capital/inventory/distribution barriers, reducing entry threat.
- "Sales, financial" or "financial, digital": “sales” isn’t the same vulnerable middleman role; financial sectors are often highly regulated (raising barriers), so they don’t universally have the highest threat.

Conclusion: The best choice is "intermediation, digital," which matches the provided answer.

The threat of competitors’ entering a market is very high in industries that perform a(n) _ role and in industries where the primary product or service is _.单项选择题

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The threat of competitors’ entering a market is very high in industries that perform a(n) _____ role and in industries where the primary product or service is _____.单项选择题

类似问题

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更多留学生实用工具

希望你的学习变得更简单

The threat of competitors’ entering a market is very high in industries that perform a(n) _ role and in industries where the primary product or service is _.单项选择题

When two or more large firms form a cartel, the price of products would_ and the output would_. This collusive behaviour more likely leads to a/an____ in the level of efficiency.