Tom and his family have developed a successful business selling a liquid spray fertilizer to farmers. The fertilizer consists of rich, organic, composted material. Recently NuBreed Seed, a national seed company, has been marketing a powdered chemical fertilizer to its customers; NuBreed's fertilizer is less expensive than Tom's product. NuBreed's efforts are an example of the ___ in Porter's model for industry analysis.

Question

Business

Damien Kidd

29 June, 12:04

Tom and his family have developed a successful business selling a liquid spray fertilizer to farmers. The fertilizer consists of rich, organic, composted material. Recently NuBreed Seed, a national seed company, has been marketing a powdered chemical fertilizer to its customers; NuBreed's fertilizer is less expensive than Tom's product. NuBreed's efforts are an example of the ___ in Porter's model for industry analysis.

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Answers (1)

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Kyla Pierce · Answer 1

The correct answer is letter "C": threats of substitute products and services.

Explanation:

Porter's Five Forces is an analysis scheme developed by American Harvard business school professor Michael E. Porter (born 1947). According to Porter, those market components are:

The ease of entry for new participants in the marketplace. If entry is easy, the market becomes highly competitive. The number and activity of a company's rivals. The more rivals are the greater the competition. The possibility of a new good or service coming onto the market and eroding sales of established products. The bargaining power of suppliers. The bargaining power of consumers.

Thus, the entrance of NuBreed Seed in the same market as Tom's fertilizer represents a substitute threat according to Porter's model.