Which of the following is NOT true of the Porter's five forces model?
A) The collective strength of these forces determines the ultimate profit potential in the industry and the firms' ability to earn rates of ROI in excess of cost of capital.
B) The stronger the force is, the more limited the companies are in raising prices and earning greater profits.
C) A strong force may be regarded as a threat as it reduces the company's bargaining power and is likely to affect profit.
D) All of the options given are correct.

Question

Quizplus · Accepted Answer

All of the options given are correct. In Porter's view, the state of competition in an industry depends on five competitive forces; the collective strength of these forces determining the ultimate profit potential of the industry and the ability of firms in an industry to earn rates of return on investment in excess of the cost of capital.

Which of the Following Is NOT True of the Porter's