BS 4 Porter's Five - 201 Porters Five Forces BS 4 Porter's Five Forces-Key Threat of new entrants is low when 1 large scale operations 2 product

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201 Porter’s Five Forces BS 4 Porter's Five Forces--Key Threat of new entrants is low when 1. large scale operations 2. product differentiation 3. capital requirements 4. switching cost 5. distribution channel Threat of substitutes is high when 1. differentiation of substitute is high Bargaining power of buyers is high when 1. purchase large volume 2. standard 3. few switching costs 4. companies in the industry can’t pass the cost of input prices to their customers in the form of higher product prices Bargaining power of suppliers is high when 1. companies in the industry can do little to decrease the cost of inputs 2. production equipment is customized and costly to replace. Rivalry/price competition is high when 1. many competitors 2. low industry growth rate
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3. high fixed or storage costs 4. lack of differentiation or switching costs 5. high exit barriers 1. The cost of a key production factor is steadily rising. The product made in the industry is critical for the industry’s customers. Will the company raise the price of its product to compensate for the increased cost of making it? Why or why not? a. no, the bargaining power of buyers is high b. no, the bargaining power of buyers is low c. no, the bargaining power of suppliers is high d. no, the bargaining power of suppliers is low e. none of the above 2. Very few companies compete in a certain industry. Using Porter’s model an analyst is likely to conclude a. rivalry is high b. rivalry is low c. the threat of substitutes is high d. the threat of substitutes is low e. none of the above 3. The cost of a key production factor is steadily rising. The company competes in an industry for which customers are relatively plentiful . Will the company raise the price of its product to compensate for the increase cost of making it? Why or why not? a. yes, the bargaining power of buyers is high b. yes, the bargaining power of buyers is low c. no, the bargaining power of suppliers is high d. no, the bargaining power of suppliers is low e. none of the above 4. Genco operates in an industry that produces products that are essential for the lives of its customers. An analyst looking at Genco’s industry most likely will conclude the bargaining power of a. Buyers is high b. Suppliers is low c. Buyers is low d. Suppliers is high e. None of the above 5. Uneek’s competitive advantage stems from its hard-fisted use of large scale operations . An analyst studying Uneek’s industry most likely will conclude that the threat of
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This note was uploaded on 03/08/2010 for the course ACCY 201 taught by Professor Curtis during the Fall '08 term at University of Illinois at Urbana–Champaign.

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BS 4 Porter's Five - 201 Porters Five Forces BS 4 Porter's Five Forces-Key Threat of new entrants is low when 1 large scale operations 2 product

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