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

According to Porter, a segment is unattractive if buyers possess strong or growing bargaining power. The other options are either incorrect or incomplete. For example, option A is incorrect because an inability to raise prices or reduce quantity supplied does not necessarily make a segment unattractive; in fact, it could have the opposite effect by increasing competition. Option C is incomplete because substitutes may either add or subtract from the attractiveness of a market or market segment, depending on various factors. Option D is also incorrect because numerous, strong, or aggressive competitors can reduce the attractiveness of a market or market segment by reducing profitability. Option E is incomplete because it ignores other important factors that affect the attractiveness of a market or market segment.

Which of the Following Statements Is True About the Five