Question

Suppose you are a sales representative for Advanced Micro Devices (AMD) in Japan. You are trying to convince Toshiba to buy your company's superfast Opteron microprocessor for its new laptop computer. Toshiba's representative seems interested, but eventually does not actually place an order. Confidentially, the representative tells you that he is afraid that Intel will withhold shipments of its Pentium 4 if he does business with AMD. Thinking about Intel's role in this scenario, which of the following elements of the five forces model is evident here?

A) barriers to entry
B) Bargaining Power of Buyers
C) Threat of Substitutes
D) Bargaining Power of Suppliers
E) Intensity of Competitive Rivalry

Answer 1

The element of the five forces model evident in this scenario is (B) Bargaining Power of Suppliers.

Step-by-step explanation:

The element of the five forces model that is evident in this scenario is Bargaining Power of Suppliers.

In this scenario, Toshiba's representative is afraid that Intel, the supplier of Pentium 4 microprocessors, will withhold shipments if Toshiba does business with AMD. This demonstrates the power Intel has as a supplier to potentially restrict Toshiba's access to a key component for its new laptop computer.

This situation highlights the importance of suppliers in influencing a company's decisions and their ability to control the supply of critical components or resources.