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Commercial Pilot Licence (CPAER) – Canada · Question

A Canadian company operating in a highly regulated industry decides to invest significantly in lobbying efforts to influence upcoming legislation. This primarily relates to which force in Porter's Five Forces model?

Government regulation can significantly act as a barrier to entry for new competitors. Lobbying efforts to shape legislation, especially in regulated industries

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Question: A Canadian company operating in a highly regulated industry decides to invest significantly in lobbying efforts to influence upcoming legislation. This primarily relates to which force in Porter's Five Forces model?

Answer options:

  • Bargaining power of buyers. ✅ Threat of new entrants.
  • Bargaining power of suppliers.
  • Threat of substitute products or services.

Correct answer: Threat of new entrants.

Explanation: Government regulation can significantly act as a barrier to entry for new competitors. Lobbying efforts to shape legislation, especially in regulated industries, can increase these barriers, thereby addressing the threat of new entrants.

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