Topic Overview: Porter's Five Forces Model is a framework developed by Michael Porter that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy. These external industry level forces include the threat of entry, the power of suppliers, the power of buyers, the threat of substitutes, and rivalry among existing firms. Within this section, you will be given a statement from HP's 2014 Form 10-K, and you must choose which force the example statement is most closely related to.
"We encounter aggressive competition from numerous and varied competitors in all areas of our business, and our competitors may target our key market segments. We compete primarily on the basis of technology, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, availability of application software, and internet infrastructure offerings." (See pages 18 and 19, 10-K.)
A) Threat of Entry
B) Power of Suppliers
C) Power of Buyers
D) Threat of Substitutes
E) Rivalry among existing competitors