Cheng-En Has Just Completed a Study for His Company, NewElectronics

Multiple Choice

Cheng-En has just completed a study for his company, NewElectronics, Inc., which produces wireless earbuds. This study focuses on the major threats to NewElectronics. Cheng-En has found that his company has one major rival, MagicSounds, Inc., which has developed impressive brand loyalty. Cheng-En's company uses a specific type of metal that only a few suppliers offer. However, NewElectronics's earbuds would still be affordable for many customers. Furthermore, Cheng-En does not see any products that can be used in place of New Electronics earbuds. Based on what you know about Michael Porter's five forces model, which of the following would Cheng-En claim is the greatest threat to NewElectronics?

A) the low prices of earbuds as a result of fierce competition
B) the high price of the metal used to make the earbuds
C) the ease with which his company could enter the earbud market
D) customers bargaining to drive down the prices of earbuds