Question

The existence of high exit barriers such as ownership of specialized assets such as tower cranes for building very large crude oil carriers in the shipbuilding industry indicates that

Select one:

buyers are relatively weak because of the high switching costs created by tower cranes

the competitive rivalry in the industry is severe.

the economic segment of the external environment has shifted, but shipbuilders’ strategies have not changed.

the industry is moving toward differentiation of shipbuilding process.

Answer 1

buyers are relatively weak because of the high switching costs created by tower cranes

Explanation: Buyers have lower bargaining power because of higher switching costs.