Question

In the center of Porter's Five Forces model is competition. Which of the below represents the four outer boxes?

A. Buyer power, systems power, threat of false entrants, and threat of substitute products or services
B. Buyer power, systems power, threat of new entrants, and threat of substitute products or services
C. Buyer power, supplier power, threat of new entrants, and threat of substitute products or services
D. Business power, supplier power, threat of new entrants, and threat of powerful services

Answer 1

The four outer boxes in Porter's Five Forces model represent buyer power, supplier power, threat of new entrants, and threat of substitute products or services.

Step-by-step explanation:

The four outer boxes in Porter's Five Forces model represent the following:

Buyer power: This refers to the ability of buyers to negotiate lower prices or demand higher quality products. It depends on factors such as the number of buyers, the size of their orders, and their ability to switch to alternative products.

Supplier power: This refers to the ability of suppliers to influence prices or dictate terms to the firms in the industry. It depends on factors such as the number of suppliers, the uniqueness of their products, and their ability to switch to alternative buyers.

Threat of new entrants: This refers to the potential for new firms to enter the industry and compete with existing firms. It depends on factors such as barriers to entry, economies of scale, and existing brand loyalty.

Threat of substitute products or services: This refers to the availability of alternative products or services that can fulfill the same need as the products or services offered by firms in the industry. It depends on factors such as the price and performance of substitute products or services.