A Key Limitation of Porter's Five Forces Model of Competition

question 53

Multiple Choice

A key limitation of Porter's five forces model of competition is that:

• A)It looks only at single industries not at relationships between industries
• B)Competitors' strategies may shape industry structure,rather than structure shaping competition
• C)Industries are more complexity than can be reduced to five competitive forces
• D)The different levels of industry analysis that the five forces model can be applied to

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Definitions:

Bureaucracy

A structured organizational system characterized by strict procedures, hierarchical levels, and administrative regulations designed to manage large organizations efficiently.

Dependency

A situation or condition where one entity relies on another for support, resources, or survival.

Experimentation

The process of conducting trials to explore and evaluate new ideas, procedures, or products, often used in research and development.

Closed Systems Theory

An approach in organizational theory that views organizations as systems that are self-contained and do not interact with the outside environment.