Question

In order for a managerial team to develop an effective strategy, they first need to assess the conditions under which the organization is operating under and existing in. There are several tools available to managers to accomplish this end. One of these tools, Porter's Five Competitive Forces, allows managers to assess the level of competitiveness within a particular industry. According to strategy expent Michael Porter, business-level strategies originate within the five primary competitive forces of threats of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute products or services, and rivalry among competitors. This exercise will test your knowledge of Porter's Five Competitive Forces. However each term or phrase and read the description. Next, drag and drop the term or phrase into the correct position to correspond with the related competitive force from Porter's Five Competitive Forces. 1. Internet 2. Investments 3. Music4. Glass 5. Advertisement A. Threat of New EntrantsB. Bargaining Power of Suppliers C. Bargaining Power of BuyersD. Threat of Substitute Products or Services E. Rivalry Among Competitors

Answer 1

1. Internet - Bargaining power of buyers

With the internet buyers are much more knowledgeable about goods and services as well as having access to many more vendors. The internet has therefore increased the bargaining power of buyers.

2. Investments - Threat of Substitute Products or Services

Investment into an industry could mean that other companies are being financed to provide the goods and services that the other companies in the industry already create. This is a threat of substitute products and services.

3. Music - Threat of New Entrants

Music is dynamic and keeps evolving such that new entrants are a constant happening. These new musicians could attract the audiences of other musicians so it is a threat to entry.

4. Glass - Bargaining Power of Suppliers

If the specific kind of glass is not easy to get or is sold by one or few companies, this would mean that the bargaining power of suppliers is high due to the scarcity of the glass.

5. Advertisement - Rivalry Among Competitors

Advertisement is a way of telling consumers to buy a product from the company advertising instead of its customers. Advertising is therefore a medium of expression for rivalry amongst competitors.