- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 7. Business Models
- Subject 1. Define the Business Model
CFA Practice Question
Michael Porter's five forces describes an industry's:
B. competitive intensity
C. competitive dynamics within the value chain
A. competitive structure
B. competitive intensity
C. competitive dynamics within the value chain
Correct Answer: C
Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. These five forces are competition in the industry, potential of new entrants into the industry, power of suppliers, power of customers, threat of substitute products.
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