Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 14AA
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Question
How does Michael Porter define a substitute product? What are substitutes for Cash App's products and services?
Expert Solution
Step 1
Threat of substitutes in one of the 5 forces that porters model describes in context to how different industries sustain different levels of profitability.
He describes substitute products as those goods that can be used in place of what a business has to offer. A business offering a product with no close substitute has a better chance of locking larger profits because consumer cannot shift to other competitors when prices rise even slightly.
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