Five forces model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy.

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The five forces model suggests that firms should analyze the industry structure and target the industry with the highest potential for above-average returns. After selecting the industry, firms can then choose to implement either a cost-leadership strategy or a differentiation strategy to achieve a competitive advantage within the industry.

Five Forces Model Suggests That Firms Should Target the Industry