Keeping in Mind the Five Forces in the Airline Industry

Multiple Choice

Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit?

A) Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry.
B) Suppliers have weak bargaining power because they offer products that are not differentiated.
C) Entry barriers in the industry are high, resulting in hardly any new airlines popping up.
D) Consumers in the industry make decisions based on price, thus reducing the intensity of rivalry in the industry.