Question

According to Porter's five forces model, which of the following firms would be least affected by the threat of substitutes?

A) a used car dealership in New YorkB) a convenience store that sells retail productsC) a firm that sells the only drug for a diseaseD) corner latte shops in Atlanta

Answer 1

Answer: According to Porter's five forces model "C) a firm that sells the only drug for a disease" would be least affected by the threat of substitutes.

Explanation: Generally, firms that sell drugs for a disease have patents on them, which is an entry barrier for other companies in that market. Therefore a firm that sells the only drug for a disease is probably little affected by the threat of substitutes.