Which of the five forces is powerful when no satisfactory substitutes are available? Demographic, economic, political/legal, sociocultural, technological, and global are the six elements compromising the industry environment. Suppliers are powerful when no satisfactory substitutes are available, selling the industry is relatively more concentrated, and switching costs are high.
When the force of threat of substitutes is strong this could mean that in the industry? When there is a strong threat of substitutes, industry players must pay more attention to operating in the most efficient manner possible; otherwise, their high cost structures will interfere with profitability and may drive some firms out of business.
Which of the following characteristics indicate that the supplier group is powerful? A supplier group is powerful when: It is dominated by a few large companies and is more concentrated than the industry to which it sells. Satisfactory substitute products are not available to industry firms. Industry firms are not a significant customer for the supplier group.
Which of the following increases the power of buyers? The power of buyers increases when they have leverage over suppliers and can demand deep discounts and special services. If a supplier has a small number of buyers, the supplier is at a disadvantage since losing even one buyer could be devastating.
Which of the five forces is powerful when no satisfactory substitutes are available? – Related Questions
Which one of the following is not among Porters competitive forces?
Solution(By Examveda Team)
What are substitute threats examples?
Butter and margarine, beer and wine, coffee and tea are all classic examples of substitute products. They are a threat to profitability because they put a cap on the prices that you are able to charge for your products and services.
What increases threat of substitutes?
Companies are concerned that substitute products or services may displace their own.
The threat of substitution is high when rivals, or companies outside the industry, offer more attractive and/or lower cost products.
Buyers then have the opportunity to make a performance/price trade-off.
Which of Porter’s five forces is the strongest?
According to Porter, Rivalry among competing firms is usually the most powerful of the five competitive forces.
What makes a supplier group powerful?
The following conditions indicate that a supplier group is powerful: It is dominated by a small number of companies and is more concentrated than the industry to which it sells. It is not required to contend with substitute products for sale in the industry. The industry is not one of the supplier’s important customers.
How do you know if an industry is attractive?
The following indicates an attractive industry:
Threat of entrants is low.
Threat of substitute products is low.
Bargaining power of buyers is low/weak.
Bargaining power of suppliers is low/weak.
Intensity of rivalry among existing firms is low.
What is Buyer bargain power?
The Bargaining Power of Buyers, one of the forces in Porter’s Five Forces Industry Analysis framework, refers to the pressure that customers/consumers can put on businesses to get them to provide higher quality products, better customer service, and/or lower pricesFiscal PolicyFiscal Policy refers to the budgetary
What is the threat of entry?
The Threat of New Entrants Explained
What is Porter’s 5 Forces Analysis example?
Five Forces Analysis Live Example
Which one of Porter’s five forces is high when it is easy?
Here , one of the Porter’s five forces i.e. threat of the new entrants is high when it is easier for the new organization to enter the market and vice versa.
What is Porter’s model of competitive advantage?
Porter’s Five Forces is a framework for analyzing a company’s competitive environment. The number and power of a company’s competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company’s profitability.
Which of these is one of Porter’s five forces?
Porter identified five factors that act together to determine the nature of competition within an industry. These are Suppliers bargaining Power, Buyer’s bargaining Power, Competitive Rivalry, threat of substitution and threat of new entry.
What are some examples of substitute goods?
Examples of substitute goods
Coke & Pepsi.
McDonald’s & Burger King.
Colgate & Crest (toothpaste)
Tea & Coffee.
Butter & Margarine.
Kindle & Books Printed on Paper.
Fanta & Crush.
Potatoes in one Supermarket & Potatoes in another Supermarket.
Why is the threat of substitutes low?
Threat of Substitutes Interpretation
What industries experience the greatest threat from substitutes?
Information-based industries experience the greatest threat from substitutes.
Companies can impose switching costs to deter people from purchasing alternative products.
Switching Costs – the costs, in money and time, imposed by a decision to buy elsewhere.
What is relative price performance of substitutes?
Relative price performance of substitutes is the price of substitutes for your output compared to the price you are charging. If the price of substitutes is lower, the competitive threat increases as the price differential increases.
How can we reduce threat of new entrants?
A high production-profitability threshold requirement, or economy of scale, is an entry barrier that can lower the threat of entry.
Highly differentiated products or well-known brand names are both barriers to entry that can lower the threat of new entrants.
