Which of the following is true according to Porter's model?
A)When start-up costs are low, the threat of new entrants to existing businesses is high.
B)The power of buyers reduces when deep discounts can be demanded of suppliers.
C)The power of suppliers is high when constant competition forces them to innovate.
D)The threat of substitutes is high when there are very few alternative products.

Question

Quizplus · Accepted Answer

According to Porter's model, low start-up costs make it easier for new entrants to enter an industry, increasing the threat to existing businesses.

Answer: B
 The power of buyers increases when they can demand deep discounts from suppliers, reducing the bargaining power of suppliers.

Answer: C
 The power of suppliers is high when they have few competitors and can innovate and increase prices without losing customers.

Answer: D
 The threat of substitutes is high when there are many alternative products available, reducing the value of the existing product and making it easier for customers to switch.

Which of the Following Is True According to Porter's Model