ExpertMedium2 marksMultiple Choice
Syllabus A: The business organisation and its external environmentSyllabus APorter's Five ForcesStrategy
ACCA · Question 13 · Syllabus A: The business organisation and its external environment
[Section A] In the context of Porter's Five Forces, a manufacturer of premium Electric Vehicles (EVs) is analyzing its market position. The manufacturer notes that public transportation networks are improving rapidly, and e-bikes are becoming highly popular for urban commuting. Which of Porter's forces do these developments primarily strengthen?
[Section A] In the context of Porter's Five Forces, a manufacturer of premium Electric Vehicles (EVs) is analyzing its market position. The manufacturer notes that public transportation networks are improving rapidly, and e-bikes are becoming highly popular for urban commuting. Which of Porter's forces do these developments primarily strengthen?
Answer options:
A.
Bargaining power of buyers
B.
Threat of new entrants
C.
Threat of substitute products or services
D.
Intensity of competitive rivalry
How to approach this question
Determine if the alternatives (public transport, e-bikes) are direct competitors in the same industry, or different products fulfilling the same underlying need.
Full Answer
C.Threat of substitute products or services✓ Correct
Substitute products fulfill the same basic need as the industry's product but use a different technology or approach. For a car manufacturer, trains, buses, and bicycles are substitutes, whereas other car brands are direct competitors (rivalry).
Common mistakes
Confusing substitutes with direct competitors (rivalry). Substitutes come from outside the immediate industry.
Practice the full ACCA BT — Business & Technology Practice Exam 2
52 questions · hints · full answers · grading
More questions from this exam
Q01[Section A] A global non-governmental organization (NGO) providing clean water infrastructure in ...MediumQ02[Section A] 'NovaTech', a rapidly growing AI startup, was initially built around its charismatic ...MediumQ03[Section A] A multinational pharmaceutical company is implementing blockchain technology to track...MediumQ04[Section A] A newly assembled cross-border remote team of software developers is currently experi...EasyQ05[Section A] An emergency room administrator at a busy urban hospital uses the Urgent/Important ma...Medium