In Porter's framework, what is considered the sixth force?

Prepare for the CIMA Managing Performance (E2) Exam. Practice with flashcards and multiple-choice questions, each with explanations. Get ready for your exam!

Multiple Choice

In Porter's framework, what is considered the sixth force?

Explanation:
The sixth force is government. Government influence matters because regulations, laws, subsidies, tariffs, licensing, and public procurement can directly alter industry profitability by changing entry barriers, costs, and competitive dynamics. For example, stricter regulations can raise costs for entrants, subsidies can boost certain players, and antitrust actions can reshape rivalry. While technology and consumers (buyer power) affect the five forces, they are not typically counted as an extra force beyond the original five.

The sixth force is government. Government influence matters because regulations, laws, subsidies, tariffs, licensing, and public procurement can directly alter industry profitability by changing entry barriers, costs, and competitive dynamics. For example, stricter regulations can raise costs for entrants, subsidies can boost certain players, and antitrust actions can reshape rivalry. While technology and consumers (buyer power) affect the five forces, they are not typically counted as an extra force beyond the original five.

Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy