According to Michael Porter, There Are Five Determinants of Competition

question 78

Multiple Choice

According to Michael Porter, there are five determinants of competition. An example of _____ is when a buyer purchases a large fraction of an industry's output and can demand price concessions.

• A) threat of entry
• B) rivalry between existing competitors
• C) pressure from substitute products
• D) bargaining power of buyers
• E) bargaining power of suppliers

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Definitions:

Direct Method

A method of allocating service department costs directly to production departments without considering inter-service department flows.

Accounts Receivable

Funds that clients or customers owe to a company for products or services provided but for which payment has not yet been received.

Accounts Payable

Money owed by a company to its suppliers or vendors for goods and services received, representing a liability on the balance sheet.

Direct Method

A financial accounting method that allocates service department costs directly to production departments without considering services rendered between service departments.