Question

Which one of the following is NOT generally considered a key factor in assessing industry attractiveness? Select one: a. Buyer power b. Threat of substitutes c. Threat of regulation

Answer 1

c. Threat of regulation

Step-by-step explanation:

Michael Porter's five forces model states factors for assessing an industry's attractiveness. Following are the five forces as per porter:

1. Buyer power: Refers to negotiation power of buyers in a industry
2. Supplier Power: Refers to supplier's power to charge a price for inputs.
3. Threat of substitutes: Refers to competitors already making homogeneous or similar products.
4. Degree of Rivalry i.e the intensity of competition in an industry
5. Threat of new entrants: Threat of new firms entering the industry and gaining a market share.

Thus, Threat of regulation is not considered amongst 5 forces that are used to assess industry attractiveness.