Which of the following can be defined as a threat according to the five forces model?Multiple ChoiceProducts are unique and cannot be substituted.There are a large number of suppliers.Brand loyalty is very high.Only a few large customers are available to buy an industry's output.The level of rivalry among organizations in an industry is low.
Question
Which of the following can be defined as a threat according to the five forces model?Multiple ChoiceProducts are unique and cannot be substituted.There are a large number of suppliers.Brand loyalty is very high.Only a few large customers are available to buy an industry's output.The level of rivalry among organizations in an industry is low.
Solution
According to the Five Forces Model by Michael Porter, a threat can be defined as any factor that can reduce a company's ability to achieve its business goals and objectives. In the context of the multiple-choice options provided:
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Products are unique and cannot be substituted: This is not a threat but rather a strength as it reduces the threat of substitution.
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There are a large number of suppliers: This is not a threat but rather a strength as it reduces the supplier power.
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Brand loyalty is very high: This is not a threat but rather a strength as it reduces the threat of new entrants and rivalry.
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Only a few large customers are available to buy an industry's output: This is a threat as it increases the bargaining power of buyers.
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The level of rivalry among organizations in an industry is low: This is not a threat but rather a strength as it reduces the intensity of competitive rivalry.
So, the correct answer is "Only a few large customers are available to buy an industry's output."
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