The Primary Purpose of Applying Michael Porter's Five Forces Model

question 9

Multiple Choice

The primary purpose of applying Michael Porter's five forces model is to

• A) waste time and resources.
• B) determine the profit potential of an industry.
• C) maximize opportunities and threats in the external environment.
• D) increase uncertainty regarding environmental characteristics.

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Definitions:

General Level

Typically refers to the overall state or condition of something, often used in discussions about prices, economic conditions, or the level of activity in a market.

Convertibles

Securities, usually bonds or preferred shares, that can be converted into a specific number of shares of the issuing company's common stock.

Call Protection

Call Protection is a feature of some bonds that prohibits the issuer from redeeming the bond before a specified period, protecting bondholders from early repayment.

Conversion Feature

Refers to an option within a bond or preferred stock that allows the holder to convert it into a certain number of shares of the issuing company's common stock.