Which statement best identifies the single most affected Five Force from the risk below? “The company sources 55% of key components from one country subject to new export controls and logistics bottlenecks.”

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BlackTom AI · Accepted Answer

Here is the question and the options to consider: Which statement best identifies the single most affected Five Force from the risk described? “The company sources 55% of key components from one country subject to new export controls and logistics bottlenecks.”

Option a: Threat of Substitutes. This risk focuses on customers switching to alternative products or services. The scenario provided concerns input sourcing and external constraints in a country of origin, not the availability of substitute products for the company’s offerings. Therefore, substitutes as a force is not the primary concern raised by this situation.

Option b: Threat of New Entrants. This force relates to how easy or hard it is for new competitors to enter the market. The described risk about sourcing concentration and export controls does not directly address entry barriers or the likelihood of new players entering the industry, so this option does not capture the central risk described.

Option c: Bargaining Power of Buyers. This force concerns customers’ ability to influence price and terms. The scenario emphasizes supply constraints from a single country rather than customer leverage or demand conditions, so buyers’ power is not the primary affected force here.

Option d: Bargaining Power of Suppliers. This is about suppliers’ ability to affect terms, prices, and supply continuity. When 55% of components come from a single country and that country is subject to export controls and logistics bottlenecks, the supplier side gains leverage: disruptions or price swings from that country can directly threaten supply stability and cost. The concentration of supply in one origin heightens supplier power due to dependency, potential restrictions, and increased negotiation leverage in securing components.

In summary, the risk described—heavy reliance on a single country for a majority of key components coupled with potential export controls and logistics delays—primarily amplifies the Bargaining Power of Suppliers, since the company is highly exposed to the supplier country’s actions and constraints. The other forces (substitutes, entrants, buyers) do not align as closely with the core issue of supply concentration and external restrictions, making them less central to this scenario.

ACF5130 - S2 2025 Quiz 1

Which statement best identifies the single most affected Five Force from the risk below? “The company sources 55% of key components from one country subject to new export controls and logistics bottlenecks.”

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