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You work at XYZ manufacturers and a competitor has just released a rival washing machine to the product that you make. This model is proving popular with customers. What competitive force is at play?
Suggested Answer: B
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This is a threat of a new entrant. The competitor has now entered the washing machine market and is competing directly with you. This is not a threat of substitution as it is the same product. A substitution would be if they invented a new product that washed clothes and people started buying this instead of washing machines. There are many questions in the exam on Porter's 5 Forces - see p. 39
32 comments · newest first
CH
Chauncey
11 months ago
Wait, are we sure it's not just a marketing gimmick?
LU
Lucy
11 months ago
Agree, substitution is the key here!
CH
Christa
11 months ago
I think it's more about buyer power, honestly.
LE
Leonardo
11 months ago
New entrants are always a risk, but this feels like substitution to me.
TR
Truman
11 months ago
Definitely the threat of substitution.
LI
Linette
12 months ago
I’m a bit confused, but I thought supplier power was more about how much control suppliers have over prices, not competitors.
AM
Amie
12 months ago
I feel like this question is similar to one we did in class about competitive forces. I think it’s definitely about buyer power.
RY
Ryan
1 year ago
I'm not entirely sure, but I remember something about new entrants being a concern too. Could it be that?
MA
Marvel
1 year ago
I think this might be the threat of substitution since a rival product is taking customers away from us.
PH
Phuong
1 year ago
I'm a little confused by this question. Is the competitor's model really a substitute, or could it be that they have more supplier power or buyer power? I'll have to review my notes on Porter's Five Forces to make sure I'm understanding this correctly.
AN
Annette
1 year ago
Okay, I think I've got it. The competitor's washing machine is a direct substitute for the product we make, so the competitive force at play is the threat of substitution. I'm confident that A is the right answer.
JU
Judy
1 year ago
Hmm, I'm a bit unsure here. Is it really a threat of substitution, or could it be a threat of new entrant since the competitor is new to the market? I'll have to think this through carefully.
PA
Paris
1 year ago
This seems like a straightforward question about Porter's Five Forces. The competitor's popular washing machine model is likely a threat of substitution, so I'll go with option A.
DA
Dahlia
2 years ago
C'mon, people. It's obviously A - threat of substitution. Unless our washing machines can clean clothes AND do the laundry dance, we're in trouble.
ST
Stevie
1 year ago
B) threat of new entrant
MI
Miss
1 year ago
I agree, we need to step up our game to compete with the new rival washing machine.
JO
Joanna
2 years ago
A) threat of substitution
DE
Delisa
2 years ago
This is a no-brainer. It's A - threat of substitution. Who doesn't love a good spin cycle showdown?
AN
Annice
2 years ago
Hmm, I'd say it's D - buyer power. Customers are clearly loving that new model, and they hold all the cards now.
RU
Ruby
2 years ago
I see your point, Ollie. Buyer power could also be a factor in this situation.
ME
Melvin
2 years ago
I'm going with B - threat of new entrant. Looks like our competitor is making a bold move to challenge our market share.
JO
Johnson
1 year ago
D) buyer power
ER
Ernie
2 years ago
C) supplier power
LI
Lilli
2 years ago
B) threat of new entrant
MA
Marguerita
2 years ago
A) threat of substitution
OL
Ollie
2 years ago
But could it also be buyer power? If customers prefer the rival machine, they have the power to choose.
CH
Chantay
2 years ago
I agree with Kenny, the rival washing machine is a direct substitute for our product.
BR
Brynn
2 years ago
Definitely the threat of substitution. That new model is giving our washing machine a run for its money!
MA
Margurite
2 years ago
B) threat of new entrant
NO
Noble
2 years ago
I agree, that new model is really putting pressure on our sales.
LE
Leonor
2 years ago
A) threat of substitution
KE
Kenny
2 years ago
I think the competitive force at play is threat of substitution.