A major drawback of Porter's five forces model is that it does not analyze the threat of substitutes when forming a corporate strategy.

Question

Quizplus · Accepted Answer

This statement is incorrect. Porter's five forces model does analyze the threat of substitutes as one of the five competitive forces that can affect a company's profitability and competitiveness. The other four forces analyzed by the model are the bargaining power of suppliers, the bargaining power of buyers, the threat of new entrants, and the intensity of competitive rivalry.

A Major Drawback of Porter's Five Forces Model Is That