Question

The five forces model is used to ____________ understand how an individual firm creates value. determine how many firms will enter an industry. calculate the profit levels of individual firms in an industry. understand the profit potential of firms in an industry.

Answer 1

Answer:

The answer is D. to understand the profit potential of firms in an industry.

Explanation:

The five forces are:

Threat of new entrants

Threat of substitute goods

Bargaining power of supppliers

Bargaining power of consumers

Competitive rivalry.

These are the forces in an industry and when all these are well analysed and comprehended, one can identify strategy for profitability.

Threat of new entrants will affect the profitability in the industry.

The competitive rivalry in the industry will also determine profitability.