Question

Walmart refuses to stock CDs bearing parental advisory stickers for explicit lyrics or violent imagery. Recording artists who want their recordings available at Walmart have the option of altering lyrics and song titles or deleting offending tracks. Likewise, artists are sometimes asked to change album cover art if Walmart deems it offensive. Considering the elements of the five forces model this is an example of:

A) buyer power.
B) supplier power.
C) threat of new entrants.
D) threat of substitute products.
E) access to distribution channels.

Answer 1

Walmart's refusal to stock certain CDs indicates its strong buyer power in Porter's Five Forces model, as it can dictate terms to suppliers seeking distribution.

Step-by-step explanation:

The situation described with Walmart refusing to stock CDs with parental advisory stickers and requesting changes in lyrics, song titles, or album cover art illustrates an example of buyer power. Buyer power is one of the forces in Porter's Five Forces model, which refers to the ability of customers to put the company under pressure and influence its decisions and actions. In this case, Walmart exercises its power as a buyer by setting terms for the suppliers (recording artists and companies) that want to distribute their products through Walmart's extensive retail channels.