ACCA Applied Knowledge · Business and Technology · Competitive factors
Under Porter's Five Forces model, which of the following is one of the five forces that shape industry competition?
The threat of new entrants is one of Porter's five forces, alongside substitutes, buyer power, supplier power and competitive rivalry. Regulation, technology and social trends belong to PESTEL analysis of the wider environment rather than to the five forces of industry competition.
- AThreat of new entrantsCorrect
- BGovernment regulation
- CTechnological change
- DSocial trends
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 regulation, technology and social trends are external environment factors found in PEST-type analysis, not forces in this model.
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