PORTERS FIVE FORCES
A telecommunications company faces declining revenue as more consumers switch from traditional phone plans to internet-based communication apps like WhatsApp and Zoom. Which force is most relevant in this case?
A. Threat of substitutes
B. Bargaining power of suppliers
C. Threat of new entrants .
D. Bargaining power of buyers
A. Threat of substitutes
A technology startup has created an innovative AI-driven healthcare solution that aligns with its mission and has the potential to transform the industry while yielding substantial profits. However, the venture demands significant financial investment and carries considerable technological risks. How should the startup proceed to make a well-informed decision?
A. Postpone the project and explore a less risky opportunity
B. Disregard the opportunity due to high costs and associated risks
C. Prioritize customer needs over industry disruption
D. Pursue partnerships or secure funding to manage resources and mitigate risks
D. Pursue partnerships or secure funding to manage resources and mitigate risks
Ana resides in a farming-dependent community where a new government program has recently introduced subsidies for organic farming. She observes a growing demand among farmers for affordable organic fertilizers. Based on this situation, what business opportunity should Ana consider?
A. Launching a pesticide production company
B. Manufacturing and selling organic fertilizers
C. Opening a store specializing in traditional chemical fertilizers
D. Investing in a large-scale farming equipment rental service
B. Manufacturing and selling organic fertilizers
Two popular streaming services compete for market dominance by introducing lower prices, exclusive content, and special discounts for subscribers. Which force best explains the situation?
A. Competitive rivalry
B. Bargaining power of suppliers
C. Threat of substitutes
D. Bargaining power of suppliers
A. Competitive Rivalry
John is exploring the potential for his software application to be marketed on a global scale. He aims to evaluate whether the opportunity can grow through franchises and partnerships in different countries. Which "R" is John analyzing?
A. Reach
B. Resources
C. Responsiveness
D. Risks
A. REACH
In a community with high unemployment but an increasing demand for online services, which product would be the most suitable to prioritize?
A. High-end luxury goods
B. Expensive technological devices
C. Affordable internet café services
D. An environmentally harmful product
C. Affordable internet café services
A subscription-based video editing software company faces challenges as new competitors offering free editing tools enter the market. Additionally, users demand price reductions and additional features to renew their subscriptions. Which forces are impacting the company?
A. Competitive rivalry and threat of substitutes
B. Bargaining power of buyers and threat of substitutes
C. Threat of new entrants and bargaining power of buyers
D. Bargaining power of suppliers and competitive rivalry
C. Threat of new entrants and bargaining power of buyers
A company is contemplating expanding its delivery service to a new city but is uncertain about its ability to efficiently manage operations in the new location. Which "R" is being assessed?
A. Range
B. Resources Required
C. Relative Ease of Implementation
D. Returns
C. Relative Ease of Implementation
An entrepreneur observes a new government policy that bans plastic straws. What is a potential business opportunity?
A. Investing in unrelated industries
B. Reducing production costs of plastic straws
C. Entering the plastic straw market
D. Developing alternatives such as reusable or biodegradable straws
D. Developing alternatives such as reusable or biodegradable straws
A large coffee chain enters a small town where three local coffee shops have been operating for years. The new entrant offers lower prices, a loyalty program, and extended operating hours. What force is being described in this situation?
A. Competitive rivalry
B. Bargaining power of buyers
C. Threat of new entrants
D. Bargaining power of suppliers
A. Competitive Rivalry
An entrepreneur has discovered an opportunity with low production costs and high selling potential in a niche market. They are also evaluating whether this opportunity could bring a transformative change to their industry. Which two "R’s" are being analyzed?
A. Relevance and Responsiveness
B. Revenues and Revolutionary Impact
C. Resonance and Resources Required
D. Risks and Relative Ease of Implementation
B. Revenues and Revolutionary Impact
Juan runs a café in a popular tourist area that experiences high foot traffic in the summer months. However, during the rainy season, customer retention declines significantly due to fewer visitors. What strategy should Juan consider to ensure his business remains sustainable throughout the entire year?
A. Focus exclusively on catering to tourists during the summer season
B. Close the café during the rainy season to minimize operating costs
C. Introduce a range of seasonal menu items specifically designed for rainy weather, such as hot beverages and comforting soups
D. Explore partnerships with local businesses or events to draw in customers during the off-season
D. Explore partnerships with local businesses or events to draw in customers during the off-season
A cable TV provider notices a drop in subscribers as more people switch to streaming platforms offering similar or better entertainment options at lower cost. Which force is primarily at play?
A. Competitive rivalry
B. Threat of new entrants
C. Threat of substitutes
D. Bargaining power of suppliers
C. Threat of Substitutes
A team of entrepreneurs is introducing a new electric scooter that is eco-friendly, cost-effective, and simple to manufacture. The product aligns with their values and has growth potential in other cities. However, they must navigate strong competition from well-established brands. Which three "R’s" should they focus on to assess this opportunity?
A. Relevance, Risks, Reach
B. Resonance, Responsiveness, Revolutionary Impact
C. Revenues, Returns, Resources Required
D. Risks, Resources Required, Range
A. Relevance, Risks, Reach
A town has recently seen a rise in the popularity of eco-friendly initiatives, with local businesses seeking ways to minimize plastic waste and a growing demand for reusable alternatives among residents. Given these trends, which entrepreneurial venture would most effectively capitalize on this situation?
A. Selling disposable plastic containers at a discount
B. Launching a business focused on producing reusable bags and utensils
C. Opening a high-capital plastic recycling factory
D. Importing non-biodegradable products for local convenience stores
B. Launching a business focused on producing reusable bags and utensils