Which of the Following Statements Is True About the Five

question 145

Multiple Choice

Which of the following statements is true about the five forces identified by Michael Porter, that
Determine the intrinsic long-run attractiveness of a market or market segment?

• A) A segment is unattractive if the company's suppliers are unable to raise prices or reduce quantity supplied.
• B) A segment is unattractive if buyers possess strong or growing bargaining power.
• C) A segment is attractive when there are actual or potential substitutes for the product.
• D) A segment is attractive if it already contains numerous, strong, or aggressive competitors.
• E) The most attractive segment is one in which entry barriers are low and exit barriers are high.

---

Definitions:

Inventory Carrying Costs

The costs required to make or buy a product, including risk of obsolescence, taxes, insurance, and warehousing space used to store the goods.

Taxes

Mandatory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Insurance

A financial product sold by insurance companies to safeguard against financial risk and unforeseen losses.

Supply Chain Management

The actions the firm takes to coordinate the various flows within a supply chain.