Porter's Five Forces

Front

A high threat of new entrants decreases competition in an industry."

Back

False

   - Explanation: A high threat of new entrants increases competition, as new companies entering the market can challenge existing players.

Front

"The bargaining power of suppliers increases when there are few substitute inputs."

Back

True

   - Explanation: If there are few substitutes for a supplier's product, they have more power to dictate terms, such as prices.

Front

"High buyer power can force companies to lower their prices."

Back

True

   - Explanation: When buyers have strong bargaining power, they can negotiate lower prices or demand higher quality, impacting profitability.

Front

"Substitutes have no impact on industry profitability."

Back

False

   - Explanation: The presence of substitute products can limit pricing power and reduce profitability, as consumers can easily switch to alternatives.

Front

"Increased rivalry among existing competitors can lead to price wars."

Back

True

   - Explanation: When competition is intense, companies may engage in price wars to attract customers, which can erode profits.