Question

The 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.True / False.

Answer 1

True

Step-by-step explanation:

Five force model given by Michael porter is tool to analyse competition in the business. It focuses on five forces that derive competitive intensity in a business. These five forces are

1. Bargaining power of suppliers

2.Threats of new entrant

3.Threats of substitutes

4. Bargaining power of buyers

5. Industry rivalry.

The 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. This is a True statement.