Refer to the Scenario Below to Answer the Following Questions

question 54

Multiple Choice

Refer to the scenario below to answer the following questions.
Megabyte Centre (Scenario)
Your old friend Ariel Eskenazi is the owner and general manager of Megabyte Centre, a computer reseller and systems integrator located in Panama City, Panama. Since leaving IBM Canada to start a business in his home country, Ariel has watched his company grow steadily, due in large part to the business partnerships he's established over the years with large foreign computer and software firms, such as Goldstar and Microsoft. These relationships have helped his company win considerable market share in Panama, as well as in other parts of Latin America. However, in recent years, there has been a huge influx of foreign capital into Panama. For example, several large Asian firms have established subsidiaries in Panama to launch their North American operations. Tourism is also on the rise, and dozens of new hotels have been built in the metropolitan area over the past three years. As a result, demand for Megabyte's products and services has increased dramatically, but so has the level and diversity of its competition. While Megabyte's customer base has remained fairly loyal, many longtime customers are beginning to demand price concessions and enhanced service levels in return for their continued business. Ariel has recently learned that several of his former suppliers and business partners are considering establishing their own local sales offices in Panama City to sell direct to market rather than distributing through Megabyte. Ariel knows you are very knowledgeable about competitive strategy and asks for your advice. You begin by telling him a little about Michael Porter's competitive strategies framework.
-The rapid industry growth rate and increasing growth of other existing businesses relate to which one of Michael Porter's five forces?

• A) threat of substitutes
• B) threat of new entrants
• C) bargaining power of buyers
• D) bargaining power of suppliers
• E) intensity of current rivalry

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Definitions:

Strategic Role

The function and importance of a particular activity or entity within the broader context of achieving long-term objectives.

Product Portfolio

The collection of all products or services offered by a company, considered especially in terms of their relative competitive positions and market appeal.

New-product Protocol

A guideline or plan that outlines the process of developing and launching a new product, including stages from initial idea generation to market launch.

Environmental Scanning

The ongoing process of collecting information about external factors that might affect an organization's future plans and operations.