Question

What is the purpose of the Porter's Five Forces analysis?

Answer 1

Michael E. Porter has described five forces which includes -

1. " Threats of new entrants.
2. Threats of substitutes.
3. Bargaining power of suppliers.
4. Bargaining power of buyers.
5. Rivalry among the existing competitors. "

The main purpose of the five forces is to understand a company's strengths and limitations by analysing an industry. It also understands the corporate strategy. Basically, with the forces, a company can be able to sustain different levels of profitability.

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