Question

Michael Porter competitive strategies take into account how many forces for understanding the underlying fundamentals of competition?

• A. Two
• B. Three
• C. Four
• D. Five

Hint:

The name of the model, "Porter's Five Forces," directly gives away the answer. Memorizing the five forces themselves is key to understanding business strategy.

Answer 1

The Correct Option is D

Step 1: Recall the famous business strategy framework by Michael Porter. Step 1: Michael Porter, a Harvard Business School professor, developed a framework for analyzing the competitive forces within an industry to understand its attractiveness and profitability.
Step 2: List Porter's Five Forces.
Step 2: The framework is known as "Porter's Five Forces" and includes:

Threat of New Entrants: How easy it is for new competitors to enter the market.
Bargaining Power of Buyers: How much power customers have to drive down prices.
Bargaining Power of Suppliers: How much power suppliers have to drive up the price of inputs.
Threat of Substitute Products or Services: The likelihood of customers finding a different way of doing what your product does.
Rivalry Among Existing Competitors: The intensity of competition among current players in the market.
Step 3: Count the forces.
Step 3: As the name implies, there are five forces in this model.