Fact Pattern 1-1 Susan, the CEO of ABC Company, Which Was Involved in Was

Multiple Choice

Fact Pattern 1-1
Susan, the CEO of ABC Company, which was involved in the production and sale of hair care products, decided to hire new employees to develop new product lines for a planned expansion into the dog shampoo arena. She was concerned, however, that the employees specializing in canine products might leave at some point, taking company secrets with them for use in competition with ABC. She, therefore, required that the employees sign contracts containing covenants not to compete. Susan also consulted her in-house counsel, Sam, regarding the effect of some new regulations involving the use of certain chemicals in shampoo and conditioner. Sam told her, however, to ignore the regulations until some type of investigation of the company was started. Sam says that more than likely no one will ever check to see whether or not ABC is in compliance. Susan disagrees with his advice and decides to seek other counsel.
-Refer to fact pattern 1-1. The use of covenants not to compete involves which of the following forces identified by Michael Porter and referenced in the text?

A) Supplier power
B) Threat of entry
C) Substitution
D) Buyer power