Question

In: Finance

Why is there less risk on an original equipment market than on a replacement products market?

Why is there less risk on an original equipment market than on a replacement products market?

Solutions

Expert Solution

Ans. There is less risk on original equipment market than on a replacement product market because of following points:-

* In the event that a product one recently bought starts experiencing problems, original equipment manufacturer tech support offers a solution. However, replacement product market also maintain their own tech support, which their product buyers can access but these are not as good as the tech support of the manufacturer.

*Original equipment market sells product which are not only of good quality but are also durable. For example, when buying a spare tire, original manufacturer is definitely better than getting an aftermarket because one can be sure of the materials used in making it.

* Original equipment market product generally comes with product license , guarantee or warrantee which is helpful in case of any issue with new product.

*Original equipment can be replaced from anywhere where the Original equipment manufacturer retailer in present but in replacement market very few seller are there which will provide feedbacks to the issue,they always insist to buy new product rather than addressing the issue with the product we have bought from them.


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