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Question 37 - BAP18 discussion

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An overseas bank is currently undertaking a feasibility study looking into the possible launch of a new bank in the UK.

Preliminary findings suggest that the market is saturated, customers have a lot of choice and UK legislation makes It easy for them to from one bank to another.

In which area of Porter's Five Forces model would these preliminary findings be documented?

A.
Threat of now entrants.
Answers
A.
Threat of now entrants.
B.
Bargaining power of customers
Answers
B.
Bargaining power of customers
C.
Bargaining power of suppliers.
Answers
C.
Bargaining power of suppliers.
D.
Threat of substitute products or services
Answers
D.
Threat of substitute products or services
Suggested answer: B

Explanation:

The preliminary findings suggest that the market is saturated and customers have a lot of choice, which indicates that the customers have the power to switch from one bank to another. This is an example of the bargaining power of customers, which is one of the five forces of Porter's Five Forces model. The other forces are Threat of New Entrants, Bargaining Power of Suppliers, Threat of Substitute Products or Services, and Rivalry among Existing Firms.

asked 16/09/2024
Mark Anthony Acorda
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