BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Substitute products or services
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New entrants to the industry
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Bargaining power of customers
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Government regulations of the industry
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Detailed explanation-1: -Porter’s Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry’s weaknesses and strengths. Five Forces analysis is frequently used to identify an industry’s structure to determine corporate strategy.
Detailed explanation-2: -Political factor is not one of the Porter’s five force factor.
Detailed explanation-3: -Porter’s five forces are competitive rivalry, new entrants, power of buyers, power of suppliers and threat of substitutes. The purpose of Porter’s Five Forces analysis is to help businesses understand the competitive dynamics of their industry and make more informed strategic decisions.
Detailed explanation-4: -The five-forces model helps to determine both the nature of competition in an industry and the profit potential for the industry. Industries characterized by high economies of scale typically attract fewer new entrants. Buyer power tends to be higher if suppliers provide undifferentiated or standard products.