The basic premise of industry analysis is that:
A)Competition can be assessed between monopoly and perfect competition within the spectrum of industry structures
B)The level of profitability within an industry is largely determined by the dynamics of the industry structure
C)The internal variables of the firm determine a firm's performance within the industry
D)Porter's five forces are the determinants of industry intensity of competition

Question

Quizplus · Accepted Answer

Industry analysis is based on the premise that the level of profitability within an industry is largely determined by the dynamics of the industry structure, including factors such as the bargaining power of suppliers and buyers, threat of new entrants, rivalry among existing competitors, and threat of substitute products or services. While internal variables of a firm can affect its performance in the industry, they do not determine the overall intensity of competition. Porter's five forces are a framework for analyzing the industry structure and competition, but they are not the only determinants of industry intensity.

The Basic Premise of Industry Analysis Is That