Question

Topic Overview: Porter's Five Forces Model is a framework developed by Michael Porter that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy. These external industry level forces include the threat of entry, the power of suppliers, the power of buyers, the threat of substitutes, and rivalry among existing firms. Within this section, you will be given a statement from HP's 2014 Form 10-K, and you must choose which force the example statement is most closely related to.

"We encounter aggressive competition from numerous and varied competitors in all areas of our business, and our competitors may target our key market segments. We compete primarily on the basis of technology, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, availability of application software, and internet infrastructure offerings." (See pages 18 and 19, 10-K.)

A) Threat of Entry

B) Power of Suppliers

C) Power of Buyers

D) Threat of Substitutes

E) Rivalry among existing competitors

Answer 1

given statement says nothing about that there would be a new entrant in the market as HP covers global market and it takes years and years to get to the level of HP, also there is no mention of suppliers issue in the statement as well as buyers.

though emphasies has been given on the other products avaiability, but the rivalry among existing competitors like Dell and Apple can be more suitable to the given statetement.

Thus answer would be E) Rivalry among existing competitors