Question

Porter’s Five Competitive ForcesIn order for a managerial team to develop an effective strategy, they first need to assess the conditions under which the organization is operating. This activity is important because in order to successfully formulate business-level strategy and be competitive, companies need to have an extensive understanding of their industries. Porter’s Five Forces Model is one tool for accomplishing this task.The goal of this activity is to test your knowledge of Porter’s Five Competitive Forces.Match each item to the force from Porter’s Five Competitive Forces that it best describes. 1 Threat of New Entrants 2 Rivalry Among Competitors 3 Bargaining Power of Suppliers 5 Threat of Substitute Products or Services Bargaining Power of Buyers 4 Match each of the options above to the items below. Apple introduced its Homepod to the home sound system market that had been previously dominated by Sonos. Walmart demanded that all its vendors cut their prices by 15 percent. If you don't like the price of something at your local store, you can probably find it online with two-day shipping at a lower price. Consumers are drinking less diet soda in favor of things like flavored zero calorie water and fresh juices. On Amazon, the average product's cost changes every ten minutes based on data the company collects including rivals' prices.

Answer 1

Porter's Five Forces help understand competitive dynamics within an industry. The forces include the threat of new entrants, bargaining power of buyers and suppliers, threat of substitutes, and rivalry among competitors, each impacting business strategy.

Step-by-step explanation:

The Porter's Five Competitive Forces provide a framework for analyzing competition within an industry and developing a strategic response. Each force has a distinct impact on the level of competition and profitability within an industry. For instance, the threat of new entrants affects how easy or difficult it is for new firms to start competing in the industry, potentially influencing market share and profits for existing players.

Here's how each of the scenarios provided matches with the relevant force from Porter's model:

• Threat of New Entrants: Apple introduced its Homepod to the home sound system market, which had been previously dominated by Sonos. This signifies a new entrant that can potentially alter market dynamics.
• Bargaining Power of Buyers: Walmart demanded that all its vendors cut their prices by 15 percent. This demonstrates the influence that large buyers may have over suppliers, particularly when they can dictate terms and prices.
• Bargaining Power of Buyers: If you don't like the price of something at your local store, you can probably find it online with two-day shipping at a lower price. This ease of finding alternatives amplifies the bargaining power that consumers have.
• Threat of Substitute Products or Services: Consumers are drinking less diet soda in favor of things like flavored zero calorie water and fresh juices. This shift shows that substitute products can threaten existing products.
• Rivalry Among Competitors: On Amazon, the average product's cost changes every ten minutes based on data the company collects including rivals' prices. This scenario exemplifies intense competition where firms frequently adjust prices in response to competitors' actions.