Question

In the tech world, about 90 percent of the world's nearly one billion PCs run on Microsoft's operating systems and 80 percent use Intel's microprocessors. This represents which aspect of the Porter's five forces model?

A) bargaining power of suppliers
B) bargaining power of buyers
C) threat of substitute products
D) rivalry among competitors
E) threat of new entrants

Answer 1

The situation where Microsoft and Intel dominate the PC operating system and microprocessor markets respectively represents the 'bargaining power of suppliers' in Porter's Five Forces model, indicating their substantial influence over the tech industry and competition.

Option 'b' is the correct.

Step-by-step explanation:

The aspect of Porter's Five Forces model that is represented by the scenario where 90 percent of the world's nearly one billion PCs run on Microsoft's operating systems and 80 percent use Intel's microprocessors is the bargaining power of suppliers.

Microsoft and Intel, being predominant suppliers in their respective markets, have substantial power over computer manufacturers and the tech industry at large.

The historical antitrust cases against Microsoft illustrate how a company's dominant position and practices, such as exclusive dealing, tying, and predatory pricing, can be leveraged in a way that impacts competitive dynamics and the balance of power between suppliers and buyers.