Final answer:
Correct option is B) .The sudden availability of cloud computing could dramatically affect the Threat of New Entrants in Porter's Five Forces by significantly lowering the cost and barriers to enter the market. This would potentially increase competition and challenge established businesses like AllRoad Parts.
Step-by-step explanation:
The availability of cloud computing has a significant impact on Porter's Five Forces, more specifically, it could dramatically affect the Threat of New Entrants force in the industry. With the adoption of cloud computing, the initial capital investment required to start a web-based business has been significantly reduced. This makes it easier for new players to enter the market, increasing competition and potentially driving innovation and consumer choice.
Previously, the need for substantial upfront capital for infrastructure and servers could deter new businesses from entering a market. However, cloud technology allows businesses to start with lower initial costs and scalability, enabling them to compete with established firms. As such, cloud computing has the potential to democratize the marketplace, widening the field for small businesses and startups to challenge larger incumbents.
This transformation can cause a shift in the industry dynamics, where the barriers to entry are decreased, creating a more competitive environment. It has the potential to spur a larger number of small competitors, as well as enable larger firms to manage their operations more efficiently. AllRoad Parts, as a web-based retailer, would have faced increased competition due to this lowering of barriers for new entrants.