CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment
Which one of the following is NOT one of the five forces in Porter's Five Forces model of industry analysis?
Government regulation is not one of Porter's five forces. The five forces are new entrants, supplier power, buyer power, substitutes and rivalry among existing competitors. Regulation can influence these forces, for instance by raising entry barriers, but it is treated as an outside influence, not a separate force.
- ABargaining power of buyers
- BThreat of substitute products
- CGovernment regulation and policyCorrect
- DRivalry among existing competitors
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 firms. Government regulation is an external factor that may shape the forces (for example, as an entry barrier) but is not itself a force. The other three options are core forces.
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