Understanding Porter's Five Forces Model

Who developed Porter's Five Forces model and in which year?

• Warren Buffett, 1990

• Henry Ford, 1923

• Philip Kotler, 1980

• Michael Porter, 1979

Which industry is cited as having a low threat of entry due to complexity and costs?

• Technology

• Pharmaceuticals

• Education

• Retail

What does a high threat of entry indicate about a market?

• It is difficult for new competitors to enter

• Existing businesses face less competition

• New competitors can easily enter and increase competition

• The market is declining in value

What factor contributes to strong buyer bargaining power?

• Few buyers and many sellers

• Many buyers and few sellers

• Low competition among sellers

• High product differentiation

How have supermarkets like Tesco responded to strong buyer bargaining power?

• Reducing the number of stores

• Increasing product prices

• Focusing on product quality and variety

• Limiting marketing expenses

What is a significant threat of substitution in the UK supermarket industry?

• Online shopping platforms like Amazon

• Local farmers' markets

• Specialty boutique stores

• None of the above

What does strong supplier bargaining power lead to?

• Lower costs for businesses

• Higher costs for businesses

• Increased market share for suppliers

• Decreased competition in the market

Which factor intensifies rivalry in a market?

• High differentiation between competitors

• Many competitors of similar size and power

• High barriers to market exit

• Rapid industry growth

What strategy have supermarkets used to combat intense rivalry?

• Collaborating with other businesses like Greggs

• Reducing the number of operational stores

• Decreasing the range of products offered

• Focusing solely on grocery items

What outcome does Porter's Five Forces model aim to achieve for businesses?

• Better understanding of market dynamics for strategic planning

• Increase in overall market competition

• Elimination of new market entrants

• Reduction in profitability