A Major Drawback of Porter's Five Forces Model Is That

question 103

True/False

A major drawback of Porter's five forces model is that it does not analyze the threat of substitutes when forming a corporate strategy.

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Definitions:

Price Level

A measure of the average prices of goods and services in an economy over a period of time.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Nominal Exchange Rate

The price of one currency in terms of another, not adjusted for inflation differences between the countries.

Price Level

The price level represents the average of the current prices of goods and services in an economy, often measured by a price index.