Which of the Following Is a Drawback of Porter's Five

question 30

Multiple Choice

Which of the following is a drawback of Porter's five forces model?

• A) The model describes competition narrowly as a firm's closest competitors.
• B) Managers cannot determine the changing speed of an industry or the rate of innovation.
• C) It fails to provide a basis for deriving implications for a firm's strategic position within an industry.
• D) The model fails to consider that threat of substitutes can come from outside a given industry.

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Definitions:

Ascertainable Value

A value that can be precisely determined or measured.

Limited Liability Company

A corporate framework blending the direct taxation feature of a partnership and the restricted liability characteristic of a corporation.

Unmarried Partner

An individual in a committed romantic relationship who lives with another individual without being legally married to them.

Buy The Other's Interest

To purchase the ownership stake of a partner or shareholder in a business, effectively transferring their portion of ownership to the buyer.