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    PracticeACCAACCA BT — Business & Technology Practice Exam 3Question 04
    Medium2 marksMultiple Choice
    Business & TechnologyPorter's Five ForcesStrategySyllabus A

    ACCA · Question 04 · Business & Technology

    Section A

    "Solaris" manufactures residential solar panels. Recently, a breakthrough in cheap, residential geothermal heating systems has entered the market, offering homeowners an alternative way to generate clean energy.

    In the context of Porter's Five Forces, which force is primarily increasing for Solaris?

    Answer options:

    A.

    Bargaining power of buyers

    B.

    Threat of new entrants

    C.

    Competitive rivalry

    D.

    Threat of substitutes

    How to approach this question

    Identify if the new product is in the same industry or a different one fulfilling the same need. Different technology = substitute.

    Full Answer

    D.Threat of substitutes✓ Correct
    Porter's Five Forces includes the Threat of Substitutes, which occurs when products from outside the industry offer a similar benefit to the consumer. Geothermal heating is a substitute for solar panels.

    Common mistakes

    Confusing 'Threat of new entrants' with 'Threat of substitutes'.
    Question 03All questionsQuestion 05

    Practice the full ACCA BT — Business & Technology Practice Exam 3

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