According to Porter, there are five forces that must be assessed and acknowledged by any business who wishes to successfully create an effective strategy. Which of the following best demonstrates the power of a handmade furniture store as a customer?
A) The furniture store can choose credit customers based upon their credit scores.
B) The furniture store will only buy from a supplier who will give them credit terms of 30 days.
C) The furniture store will only sell to customers who can pay in cash.
D) The furniture store will require a down payment from all potential customers on pre-orders.

Question

Quizplus · Accepted Answer

This question requires familiarity with Porter's Five Forces and the impact of each on a business. Choice B is correct because it is the only choice that represents the power of the furniture store when acting as a customer. By dictating the terms that require to become a customer, they demonstrate the power they hold in that as a customer. The remaining three choices are incorrect as they represent other powers.

According to Porter, There Are Five Forces That Must Be