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Read the scenario below and answer the question that follows - English General - NSC Business Studies - Question 2 - 2024 - Paper 1
Question 2
Read the scenario below and answer the question that follows. GREENWOOD BUILDERS (GB) Greenwood Builders specialise in building properties and buy their raw materi... show full transcript
Worked Solution & Example Answer:Read the scenario below and answer the question that follows - English General - NSC Business Studies - Question 2 - 2024 - Paper 1
Step 1
Identify TWO forces of Porter’s Five Forces model that are applicable to GB.
Answer
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Threat of Supplier Power: Donga Hardware's dominance as the only provider of high-quality cement gives them substantial power over Greenwood Builders (GB). The scenario reinforces this by stating, "They pay high prices as Donga Hardware is the only provider of high quality cement." This shows that GB has limited options for sourcing cement, leading to higher costs.
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Threat of New Entrants: The decline in income due to customers building their own properties suggests a potential barrier to new entrants in the building sector. The scenario highlights this trend by stating, "GB also experiences a decline in income as some of their customers prefer to build their own properties." This indicates that new competitors may struggle to attract customers if DIY options are gaining popularity.