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    PracticeACCAACCA BT — Business & Technology Practice Exam 6Question 04
    Medium2 marksMultiple Choice
    The business organisation and its external environmentSection ASyllabus APorter's Five Forces

    ACCA · Question 04 · The business organisation and its external environment

    StreamForge is a new esports broadcasting platform. The industry is currently dominated by two massive tech giants who have exclusive, multi-year contracts with all major gaming tournaments and possess proprietary streaming compression algorithms. According to Porter's Five Forces, which force is primarily protecting the tech giants from StreamForge's entry?

    Answer options:

    A.

    Bargaining power of suppliers

    B.

    Threat of substitute products

    C.

    Threat of new entrants

    D.

    Competitive rivalry

    How to approach this question

    Look at what is stopping the new company (StreamForge) from succeeding. The existing companies have built 'moats' (contracts, tech) which are classic barriers to entry.

    Full Answer

    C.Threat of new entrants✓ Correct
    Barriers to entry (such as patents, proprietary tech, and exclusive supplier contracts) directly reduce the Threat of New Entrants in Porter's Five Forces model.

    Common mistakes

    Selecting supplier power because contracts are mentioned. The contracts are a tool used to create a barrier to entry.
    Question 03All questionsQuestion 05

    Practice the full ACCA BT — Business & Technology Practice Exam 6

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