CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

The elements of a thorough industry analysis are especially helpful in evaluating the following competitive forces: ______.

I. the threat of substitute products
II. the bargaining power of customers
III. the bargaining power of suppliers
IV. the threat of new entrants
V. the intensity of rivalry
Correct Answer: IV and V

These two forces are broadly applicable because all companies have competitors and must worry about new entrants to their industries.

User Contributed Comments 3

User Comment
Skrills wouldn't threats of new entrants and intensity of rivalry also infer a threat of substitute products?
hoyleng key word "thorough" industry analysis..
johntan1979 No, new entrants does not always mean substitutes and vice versa. Substitutes always means consumers can choose to eat beef instead of chicken.

New entrants usually mean the same products, e.g. chicken, with different brand names.
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