Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It makes buyers more price-sensitive.
B
It increases the number of competitors.
C
It reduces buyer power by providing unique value.
D
It has no effect on buyer power.
Understanding the Answer
Let's break down why this is correct
Answer
A strong value proposition makes customers see a clear benefit that they cannot get elsewhere, so they are less inclined to shop around or press for lower prices. This reduces the buyers’ bargaining power because the company’s offering feels essential or highly differentiated. As a result, buyers have fewer alternatives and are willing to pay a premium, weakening the force of buyer power in Porter's framework. For example, a smartphone maker that offers exclusive software and superior battery life makes its customers less likely to switch to a cheaper rival.
Detailed Explanation
A strong value proposition means the product offers something special that competitors do not match. Other options are incorrect because The idea that a strong value proposition makes buyers more price-sensitive is mistaken; The notion that a strong value proposition attracts more competitors is incorrect.
Key Concepts
Competitive advantage
Porter's Five Forces
Value proposition
Topic
Business Strategy
Difficulty
hard level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
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Question 2How does Porter's Five Forces model relate to the concept of strategic alignment within a business strategy framework?
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Question 3In analyzing a company's competitive advantage using Porter's Five Forces framework, which of the following best describes how a strong value proposition can influence buyer power?
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Question 4How does Porter's Five Forces model relate to the concept of strategic alignment within a business strategy framework?
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Question 5In analyzing a company's competitive advantage using Porter's Five Forces framework, which of the following best describes how a strong value proposition can influence buyer power?
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