Question

In the Five-Forces model, conditions under which a supplier group can be powerful include all the following EXCEPT: a. readily available substitute b. products lack of importance of the buyer c. to the supplier group dominance by a few suppliers d. high differentiation by the supplier

Answer 1

Answer:

The correct answer is letter "A": readily available substitute.

Explanation:

American Harvard School Professor Michael E. Porter (born in 1947) states there are Five Forces determining the factors that influence industry competition and profitability. Those forces are:

• The threat of new market players
• The threat of substitute products  
• Power of customers
• Power of suppliers
• Industry rivalry

According to Porter, the bargaining power of suppliers is powerful when switching costs of buyers are high, when there is a small number of suppliers compared to buyers, when switching costs of suppliers are low or when substitutes are unavailable.