Week 2

Question 1

What are Porter’s 5 forces?

Answer 1

1- Threat of new entrants
2- Bargaining power of suppliers
3- Bargaining power of buyers
4- Threat of substitute products or services
5- Rivalry among existing competitors

Question 2

What are some of the values of Porters’ five forces?

Answer 2

1- Useful predictor of ROR (Rate Of Return)
2- Goes beyond factors
3- Goes beyond SWOT

Question 3

What are some of the limitations of Porters’ five forces?

Answer 3

1- Too macro
2- Oversimplification of value chain
3- Fails to directly link to managerial action

Question 4

What could be a 6th force of Porter?

Answer 4

Compliments

Question 5

What is an example of a compliment?

Answer 5

Electric charging infrastructures are compliments for electric cars.

Question 6

What is network externalities with an example

Answer 6

Linkages between the users of a product or technology that result in the value of that product or technology being positively related to the number of users.

Example- Amazon is the online retailing platform with the most users (US)

Question 7

What are some of the critiques of PESTLE?

Answer 7

1- Deterministic- focuses on factors operating on the firm. No acknowledgement that firms can influence their environment.

2- Compartmentalises- reduces connections between them. e.g, Hard to understand political without economic

Question 8

What is scenario planning?

Answer 8

Making assumptions about the future and determining how your organisation will respond.

Question 9

What would be a substitute of cinemas?

Answer 9

• Platforms such as Netflix
• Can be other social things such as go karting, top golf. It doesn’t necessarily have to be a direct form of competition.