Question

Porter's __________ Analysis assumes that there are five important forces that determine competitive power in a business situation.

• A. Five forces
• B. Four Forces
• C. Ten Forces
• D. Three Forces

Answer 1

The correct option is A Five forces

Porter's Five Forces Framework is a tool for analyzing competition of a business. It draws from industrial organization economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack of it) of an industry in terms of its profitability. An "unattractive" industry is one in which the effect of these five forces reduces overall profitability. The most unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit levels.