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:

Telephone Costs

Expenses related to the usage of telecommunication services by a business, categorized as utility expenses and recorded in the income statement.

Margin Of Safety

The difference between actual or projected sales and the break-even point, measuring operational risk and efficiency.

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.

Contribution Margin Ratio

The percentage of each sales dollar that contributes to covering fixed costs and generating profit.