All categories

3 years ago

What is the Porter's 5 forces model?

Business

1 answer:

neonofarm [45]3 years ago

4 0

Answer:

Created by a Professor Michael E. Porter, from Harvard, this model explains the various forces applied to a business.

Competition in the industry : Are there competitors in the industry? If so, are they numerous and weak or is the industry dominated by a few major players?

Potential of new entrants into the industry : What's the risk of having new competition? If you are selling a product, can you protect it with a patent for example?

Power of suppliers : Can the suppliers of what you need easily affect the prices? It's basically asking if there is competition in your suppliers' market.

Power of customers : That related to your customer base. If your customer base is large, chances are no individual will be able to force your price down. But if you are dealing with a limited number of customers, one of them might force you to lower your prices.

Threat of substitute products: Is there any comparable product/service offered at a lower cost that might bring your prices down?

You might be interested in

I need HELP

RoseWind [281]

Answer:

A) is ur answer..

4 0

1 year ago

Read 2 more answers

Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process. The normal spoilag

zavuch27 [327]

Answer:

(a) The dollar value of abnormal spoilage.

$499,317.

(b) The cost of the good units finished.

$12,669,193.

$1,421,491.

The complete solution of the problem is attached with an excel spreadsheet.

Download xls

3 0

3 years ago

OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 50 thousand bond

babymother [125]

Answer:

$w_{d}$ = 0.3274 or, 32.74%

Explanation:

We know,

Capital Structure = Debt + Common Stock + Preferred stock

Given,

Common Stock = 4,000,000 shares

Share price = $21

Total common stock = No. of shares x share price

Total common stock = 4,000,000 shares × $21 = $84,000,000

Preferred Stock = 3,000,000 shares

Share price = $10

Total preferred stock = $10 x 3,000,000 shares

Total preferred stock = $30,000,000

Debt rate = 111% = 1.11

Debt = 50,000 bonds x $1000 par x 1.11

Debt = $55,500,000

Total Capital = $(55,500,000 + 84,000,000 + 30,000,000)

Total capital structure = $169,500,000

The weight for debt in the computation of OMG's WACC

= $\frac{Debt}{Total Capital Structure}$

= $\frac{55,500,000}{169,500,000}$

= 0.3274

or, 32.74%

8 0

3 years ago

Delish Foods sells jars of special spices used in Italian cooking. The variable cost is $2 per unit. Fixed costs are $9,000,000

Ymorist [56]

Answer:

$3.38 per unit

Explanation:

Total costs:

= Total fixed cost + Total variable cost

= $9,000,000 + (5,000,000 units × $2 per unit)

= $9,000,000 + $10,000,000

= $19,000,000

Target revenue:

= Total costs - Desired profit

= $19,000,000 - ($42,000,000 × 5%)

= $19,000,000 - $2,100,000

= $16,900,000

Sales price per unit = Target revenue ÷ Total units

= $16,900,000 ÷ 5,000,000

= $3.38 per unit

8 0

3 years ago

In a large open economy, if political instability abroad lowers the net capital outflow function, then the real interest rate: A

Tatiana [17]

Answer:

In a large open economy, if political instability abroad lowers the net capital outflow function, then the real interest rate falls, while the real exchange rate rises and net exports fall. (D)

Explanation:

NX = EXPORTS – IMPORTS

If political instability abroad lowers the net capital outflow function that would mean that NX is reducing, which increasing imports and decreasing exports. This means that domestic goods are relatively more expensive due to a high exchange rate. In terms of the real interest rate, it falls because the demand for financial assets decreases.

3 0

3 years ago