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 NOT one of the five forces?
Government fiscal deficit is not one of Porter's five forces. The framework covers new entrants, substitutes, buyer power, supplier power and competitive rivalry. Fiscal deficit is a macroeconomic factor, not an industry-structure force in this model.
- AThreat of new entrants
- BBargaining power of suppliers
- CGovernment fiscal deficitCorrect
- DRivalry among existing competitors
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. Government fiscal deficit is a macroeconomic variable and not a force in the framework.
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