Question

Michael Porter’s “Five Forces” framework is an effective tool for evaluating:

A. The rate of return on a company’s investments.

B. The determinants of industry profitability.

C. The strength of a company’s culture.

D. The effects of government regulations on industry survival rates.

E. None of these.

Answer 1

Correct Answer-(E) None of these.

Reason-

Michel Porter's''Five Forces'' frame work is an effective tool for evaluating the Level of cometition in an industry.

According to the framework the level of Comeptition in an industry, depends upon th following 5 forces-

1.Threat of new entrants

2.Suppliers bargin power

3.Bargin power of buyer

4.Threat of substitute products

5.Existing rival group.

Michel Porter's''Five Forces'' frame work does not evaluate Company rate of return, industry profitability, strength of company culture and effect of govt regulations etc.