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Questions and Answers
Which factor is NOT considered in the Porter 5 forces model?
Which factor is NOT considered in the Porter 5 forces model?
- Bargaining power of suppliers
- Market demand for the product (correct)
- Threat of new entrants
- Rivalry among existing competitors
What does a high bargaining power of buyers indicate according to the Porter 5 forces model?
What does a high bargaining power of buyers indicate according to the Porter 5 forces model?
- Greater leverage for buyers to negotiate prices (correct)
- Increased profitability for the companies
- Diminished importance of customer satisfaction
- Decreased competition in the industry
What is the main purpose of the Porter 5 forces model?
What is the main purpose of the Porter 5 forces model?
- To analyze the competitive intensity of an industry (correct)
- To evaluate the financial performance of a company
- To forecast future economic trends
- To assess consumer buying behavior
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Study Notes
Porter 5 Forces Model
- Government is NOT a factor considered in the Porter 5 forces model.
Bargaining Power of Buyers
- A high bargaining power of buyers indicates that buyers have a strong influence on the market and can dictate prices, demand high-quality products, and play suppliers against each other.
Purpose of the Porter 5 Forces Model
- The main purpose of the Porter 5 forces model is to analyze the competitive landscape of an industry and identify the underlying forces that drive competition, ultimately helping businesses to develop strategies to gain a competitive advantage.
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