NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis
In Michael Porter's five forces framework used for industry analysis, which of the following is treated as a force that determines industry profitability?
Bargaining power of buyers is one of Porter's five forces. The framework covers new entrants, substitutes, buyer power, supplier power and existing rivalry. Macroeconomic variables such as GDP growth or the repo rate, and the number of listed companies, are not among the five forces.
- ABargaining power of buyersCorrect
- BRate of GDP growth
- CLevel of the repo rate
- DNumber of listed companies in the industry
Explanation
Porter's five forces are threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers and rivalry among existing competitors. GDP growth and the repo rate are macroeconomic factors, and the count of listed firms is not a force.
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