Forces of Competition Model Quiz

Business Opportunities and Strategy

• Potential sources of opportunity include market gaps, emerging technologies, and changing consumer preferences.
• In business strategy, 'substitutes' refer to alternative products or services that can fulfill the same need, potentially affecting market demand.
• 'Buyers' in the business environment are the consumers or organizations that purchase goods or services, influencing pricing and sales dynamics.

Market Opportunity Assessment

• An essential aspect of assessing market opportunities is understanding customer needs and market demand to align offerings effectively.

Business Competition

• 'Rivalry' in business competition denotes the ongoing competitive struggles among existing firms, influencing pricing, market share, and profitability.
• New entrants may be discouraged by high capital requirements, which create significant barriers to entry.
• Characteristics that do not indicate the intensity of rivalry include the number of potential new entrants into the market.

Consumer Behavior and Substitutes

• Consumers are more likely to switch to a substitute product when there are price increases, superior features, or changing preferences.
• Substitute products can pose a significant threat in the industry as they may lure customers away, impacting sales and market position.

Factors Affecting Rivalry

• Factors contributing to the intensity of rivalry among existing firms include numerous competitors, slow industry growth, and high fixed costs that create pricing pressure.
• The five forces competing within an industry environment are the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitutes, and rivalry among existing competitors.

Buyer Power and New Entrants

• Factors that can reduce the threat of a buyer's bargaining power include low switching costs and a lack of alternative suppliers.
• A potential new entrant refers to a business that is considering entering a market but has not yet established operations.

Career Experience and Business Planning

• Past experiences in a prominent accounting firm can provide valuable insights into industry practices, networking opportunities, and operational knowledge for starting an accounting business.

Competition Model

• The model referred to as the 'five forces of competition' is fundamental in analyzing the competitive landscape within an industry, guiding strategic decisions.