Using the Five-Forces Model of Competition to Determine the Character

question 44

Multiple Choice

Using the five-forces model of competition to determine the character and strength of the competitive forces within a given industry involves

• A)building the picture of competition in two steps: (1)determining which rival has the biggest competitive advantage and (2)assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits.
• B)building the picture of competition in three steps: (1)identify the different parties involved,along with specific factors that bring about competitive pressures; (2)evaluate how strong the pressures stemming from each of the five forces are (strong,moderate or weak);and (3)determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry.
• C)gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage.
• D)assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures.
• E)evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors.

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