Which of the following statements is true about the five forces identified by Michael Porter, that
Determine the intrinsic long-run attractiveness of a market or market segment?
A) A segment is unattractive if the company's suppliers are unable to raise prices or reduce quantity supplied.
B) A segment is unattractive if buyers possess strong or growing bargaining power.
C) A segment is attractive when there are actual or potential substitutes for the product.
D) A segment is attractive if it already contains numerous, strong, or aggressive competitors.
E) The most attractive segment is one in which entry barriers are low and exit barriers are high.

Question

Quizplus · Accepted Answer

Michael Porter's five forces include the bargaining power of buyers, bargaining power of suppliers, threat of new entrants, threat of substitutes, and competitive rivalry. Option B is correct because if buyers possess strong or growing bargaining power, they can demand lower prices or better quality, reducing profitability for companies in that market segment. The other options are incorrect because a segment can be attractive if suppliers have limited bargaining power, there are no or low substitutes, there is high entry but low exit barriers, or if there is a high level of competition.

Which of the Following Statements Is True About the Five