3.3.3 Five Forces Model-TFQ.

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TRUE OR FALSE QUESTIONS

FIVE FORCES MODEL

Q1 The five forces model expands the arena of competitive analysis beyond direct competitors
(i.e., rivals) to include buyers and suppliers who may also be a source of competition.
TRUE or FALSE

Q2 Switching costs, access to distribution channels, economies of scale, large numbers of

competing firms, and slow industry growth are some of the entry barriers that may affect
the threat of new entrants to an industry
TRUE or FALSE

Q3 Suppliers are powerful when the industry is dominated by a few large companies, no
satisfactory substitutes are available, the selling industry is relatively more concentrated
than the purchasing industry, and switching costs are high
TRUE or FALSE

Q4 Generally, the stronger the competitive forces, the higher the profit potential of an industry.
TRUE or FALSE

Q6 An attractive industry is one that is characterized by high entry barriers, suppliers and buyers
with strong bargaining power, low threats from substitute products, and low rivalry among
firms.
TRUE or FALSE

Q5 The strengths of the five competitive forces are similar across strategic
groups within an industry.
TRUE or FALSE

Q6 Porter's Five Forces Model outlines the process for a sales strategy.
TRUE or FALSE

Q7 With the Five Forces Model, companies should watch the forces in the market. If the forces
are strong competition generally increases and if the forces are weak competition typically
decreases.
TRUE or FALSE

Q8 Mark Peterson identified the Porter's Five Forces Model which analyzes the competitive
forces within a business environment.
TRUE or FALSE

Q9 Supplier power is one of Porter's five forces and it measures the suppliers' ability to
influence the prices they charge for supplies (including materials, labour, and services).
TRUE or FALSE

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3.3.3 Five Forces Model-TFQ.docx

Q10 Polaroid had a unique competitive advantage for many years until it forgot to observe
competitive intelligence. The firm went bankrupt when people began taking digital pictures.
Polaroid provides a great example of Porter's threat of new entrants.
TRUE or FALSE

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