Porter’s Five Forces Quiz

What is the main goal of Porter’s Five Forces framework?

• To analyze a company’s financial statements

• To assess the competitive forces shaping an industry

• To create a marketing campaign

• To determine employee productivity

Which of the following is NOT one of Porter’s Five Forces?

• Threat of new entrants

• Threat of substitutes

• Internal cost efficiency

• Bargaining power of suppliers

How does the threat of new entrants affect an industry?

• It decreases competition and increases profitability

• It increases competition and reduces profitability

• It has no impact on existing firms

• It only affects small businesses

High barriers to entry make an industry:

• Less attractive for new firms

• More vulnerable to new competitors

• More competitive

• Easier to enter

Which of the following is an example of a high barrier to entry?

• Low startup costs

• High capital requirements

• Easy access to distribution channels

• Minimal regulatory requirements

What does the 'threat of substitutes' refer to?

• Rivalry between existing competitors

• The possibility of customers switching to alternative products or services

• The ability of suppliers to increase prices

• The introduction of new competitors

If many substitutes exist for a product, what happens to its price sensitivity?

• Price sensitivity decreases

• Price sensitivity remains the same

• Price sensitivity increases

• There is no effect on price sensitivity

The bargaining power of buyers is high when:

• There are many buyers and few suppliers

• There are few buyers and many suppliers

• Buyers have no alternative products to choose from

• Switching costs are high

Which of the following increases supplier power?

• There are many alternative suppliers

• The supplier provides a unique or essential product

• Buyers can easily switch suppliers

• The product is widely available

How does a company reduce the bargaining power of buyers?

• Increase product differentiation

• Standardize all products

• Lower switching costs

• Increase competition in the industry