Answer:
c. Threat of regulation
Explanation:
Michael Porter's five forces model states factors for assessing an industry's attractiveness. Following are the five forces as per porter:
- Buyer power: Refers to negotiation power of buyers in a industry
- Supplier Power: Refers to supplier's power to charge a price for inputs.
- Threat of substitutes: Refers to competitors already making homogeneous or similar products.
- Degree of Rivalry i.e the intensity of competition in an industry
- Threat of new entrants: Threat of new firms entering the industry and gaining a market share.
Thus, Threat of regulation is not considered amongst 5 forces that are used to assess industry attractiveness.
Daycare, in-home nurse, cleaning service, drivers Ed
Answer:
1. A compromise should be reached.
In the recession, the other small businesses are suffering including the company in question. If the owner pushes the customers to pay their bills, when the recession ends they may move to other vendors which would have made demanding money from them in the recession a myopic and damaging move.
The business however, also has bills to pay and so needs money to maintain operations as well. A compromise needs to be reached. The owner should contact the other businesses still owing and negotiate with them to pay a certain portion of what they owe with the rest coming later.
This could give the owner enough to keep the business running whilst maintaining the loyalty of his customers.
2. Problems that a business services company could have if customers do not pay include;
- Inability to pay staff.
- Inability to pay utilities like electricity.
- Inability to pay rent and other expenses.
- Increased risk of debt default.
- Growth of company suffers.
