Question

Which of the following are Porter's Five Forces ?
a. Threat of new entrants
b. Power of suppliers
c. Competition among competitors
d. Bargaining power of buyers
Select the correct answer using the codes given below.

• A. a and b only
• B. a and c only
• C. b and d only
• D. a, b, c and d

Hint:

Remember the names of Porter's Five Forces: New Entrants, Suppliers, Buyers, Substitutes, and Rivalry. The question covers four of these.

Answer 1

The Correct Option is D

Step 1: Recall the concept of Porter's Five Forces.
Porter's Five Forces is a strategic framework developed by Michael Porter to analyze the competitive intensity within an industry. It helps in understanding the attractiveness of an industry and a company's strategic position within it. Step 2: List the five forces identified by Porter.
The five forces are:
1. Threat of new entrants
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threat of substitute products or services
5. Intensity of rivalry among existing competitors
Step 3: Compare the listed options with Porter's Five Forces.
a. Threat of new entrants: This is one of Porter's Five Forces, representing the risk that new companies will enter the industry and increase competition.
b. Power of suppliers: This corresponds to the bargaining power of suppliers, which is another of Porter's Five Forces, analyzing the influence suppliers have on input costs and availability.
c. Competition among competitors: This is equivalent to the intensity of rivalry among existing firms, another of Porter's Five Forces, examining the competitive dynamics between current players.
d. Bargaining power of buyers: This is one of Porter's Five Forces, assessing the ability of customers to influence prices and demand better value.
Step 4: Identify which of the listed items are included in Porter's Five Forces.
All the listed items (a, b, c, and d) directly correspond to four of the five forces in Porter's framework. Step 5: Select the option that includes all the identified forces.
Option (4) "a, b, c and d" includes all the listed items.