Which factor is a reason for the increased threat of new entrants in the performance-based industry?

The rapid rate of innovation in design is a significant factor contributing to the increased threat of new entrants in the performance-based industry. When a sector is characterized by fast-paced innovation, it creates opportunities for new brands to differentiate themselves by offering unique products or features that are appealing to consumers. This environment encourages entrepreneurial ventures, as innovative designs can be developed with relative ease, allowing new competitors to enter the market and attract attention.

Additionally, the focus on performance-driven attributes draws in companies that may not have previously participated in the sector, as they believe they can leverage their unique designs to capture market share. The potential for success in a market driven by continual innovation provides the impetus for new entrants to emerge and challenge established players. As a result, the dynamic nature of design innovation heightens competition and makes it more challenging for existing companies to maintain their market position.