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CMA Intermediate · Operations Management and Strategic Management · Strategic Analysis and Strategic Planning

In Porter's Five Forces framework, which of the following is NOT treated as one of the five competitive forces shaping industry profitability?

Bargaining power of government regulators is not one of Porter's five forces. The five are new entrants, supplier power, buyer power, substitutes and rivalry among existing firms. Government policy can affect these forces, but it is not counted as a separate force in the model.

  1. AThreat of new entrants
  2. BBargaining power of buyers
  3. CBargaining power of government regulatorsCorrect
  4. DThreat of substitute products

Explanation

Porter's five forces are threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes and rivalry among existing competitors. Government regulation may influence the forces but is not itself one of the five. The other three options are all named forces.

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