Which of Porter's Five-Forces is most directly influenced by the following factors: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?
A) threat of new entrants
B) rivalry among existing firms
C) threat of substitutes
D) bargaining power of buyers
E) bargaining power of suppliers

Question

Quizplus · Accepted Answer

The factors mentioned directly affect the intensity of competition and rivalry among existing firms, which is the second force in Porter's Five-Forces framework. The number and balance of competitors, degree of product differentiation, and industry growth rate all affect how aggressive firms are in competing for market share, while the level of fixed costs can influence firms' willingness to cut prices and engage in price wars.

Which of Porter's Five-Forces Is Most Directly Influenced by the Following