Question

Which of the following is NOT one of Porter's five primary forces?

1. Rivalry among competing sellers in an industry
2. Threat of potential new entrants in an industry
3. Threat of flooding the industry with excellent products
4. Bargaining power of suppliers in an industry
5. Substitute products from another industry

Answer 1

3. Threat of flooding the industry with excellent products

Step-by-step explanation:

Here are Porter's five primary forces:

- Competition between organizations in the same industry.

This create a sense of rivalry that force each organizations to keep improving their products and services.

This is what represented by option 1.

- Potential of new entrants into the industry.

New entrants into the industry will take a portion of market share. This will benefit the customers because it often force competitors to lower the price of their product

This is what represented by option 2

- Power of suppliers.

Suppliers have the ability to connect the producers and the customers. This give them enough leverage to influence the price imposed by the company.

This is what represented by option 4

- threat of substitute products.

Just like new entrants, substituted products could also take away the market share and reduce the profit that can be taken by companies. This is what represented by option 5.

- Power of customers

Customers could create a demand based on their preference. Companies will have to tried their best to fulfill this demand if they wanted to survive.

This is not mentioned in the options above.