BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
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True
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Detailed explanation-1: -A Five Forces analysis can help companies assess industry attractiveness, how trends will affect industry competition, which industries a company should compete in-and how companies can position themselves for success.
Detailed explanation-2: -Porter’s Five Forces Model is an important tool for understanding the main competitive forces at work in an industry. This can help you to assess the attractiveness of an industry, and pinpoint areas where you can adjust your strategy to improve profitability.
Detailed explanation-3: -Porter described the five forces that can measure the long-term attractiveness of an industry. They forces are: Threat of New Entrants, Threat of Substitutes, Bargaining Power of Customers, Bargaining Power of Suppliers and Competitive Rivalry.
Detailed explanation-4: -An “unattractive” industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition", in which available profits for all firms are driven to normal profit.