porters five forces Flashcards
1
Q
rivalry amongst existing firms in the industry
influences on business
A
- degree of promotion
- ability to keep prices/costs down
- levels of innovation
- mergers/takeovers
2
Q
if there is intense competition in a market, it will encourage businesses to engage in…
A
- price wars
- investment in innovation
- intensive promotion
- cost control - long-term survival
3
Q
threat of substitutes
how does this affect businesses?
A
- continuously invest in R&D
- increase the elasticity of your product
4
Q
the extent to which the threat of substitutes depends upon
A
- the willingness of customers to switch
