2: B.1. Analyzing External and Internal Environments

Question 1

What are Porter’s 5 Forces?

Answer 1

Michael Porter’s model identifies 5 competitive forces that affect every industry:-

1- Competitive rivalry
2- threat of new entry
3- threat of substitutes
4- Bargaining power of suppliers
5- bargaining power of customers

Question 2

The concurrent action of basic competitive forces, as defined by Porter’s 5 forces model, determines the

A. long-term profitability and the competitive intensity of the industry.
B. Rivalry inside the industry.
C. Entrance barriers that potential players must face to get into the industry.
D. strategy that a firm should follow to achieve its objectives.

Answer 2

A is the Correct answer