Porter's Five Forces Model Overview
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Porter's Five Forces Model Overview

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Questions and Answers

Which of the following is not a factor that can give newer companies an advantage?

  • Older equipment (correct)
  • Younger workforce
  • New efficiencies
  • New product offerings

    • Which of the following scenarios presents the greatest customer switching difficulty, and thus, decreases the competitive force of customers?

  • Customers face high switching costs and cannot easily switch to competitor's products (correct)
  • Customers easily switch to competitor's products due to low switching costs
  • Customers have a wide array of competitor products to choose from
  • Customers can force firms to compete solely based on price

    • Which industry is most likely to have lower barriers to market entry, making it easier for new entrants?

  • Aerospace engineering
  • Telecommunications
  • Microchip manufacturing
  • Food service (correct)

    • What is the most likely effect of substitute products and services on a company's pricing strategy?

    <p>Forces the firm to adjust pricing to remain competitive</p> Signup and view all the answers

    How does a firm's control over suppliers impact its competitive positioning?

    <p>Having more suppliers decreases control and competitiveness</p> Signup and view all the answers

    Which of the following scenarios is most likely to result in a firm exercising the greatest control over its suppliers?

    <p>The firm operates in an industry with a small number of suppliers and few substitute products available to the firm.</p> Signup and view all the answers

    Which of the following scenarios is most likely to result in customers forcing a firm and its competitors to compete on price alone?

    <p>Customers are highly price sensitive and are constantly searching for the lowest price.</p> Signup and view all the answers

    Which of the following is most likely to give newer companies an advantage when entering a market with traditional competitors?

    <p>Access to new and innovative technologies.</p> Signup and view all the answers

    Which of the following is most likely to result in a customer easily switching to a competitor's product?

    <p>The customer has no preference between the firm's product and the competitor's product and is easily swayed by price.</p> Signup and view all the answers

    Which of the following industries is most likely to have low barriers to entry, making it easier for new entrants?

    <p>The software industry</p> Signup and view all the answers

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