The five forces model helps one understand the ___ of an industry.

• A. production technology
• B. macroeconomic trends
• C. competitive structure
• D. government regulations

Answer: (C)

Verified step by step guidance

1. Understand that the five forces model, developed by Michael Porter, is a framework used to analyze the competitive environment of an industry.
2. Recognize that the model focuses on five key forces: the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and industry rivalry.
3. Note that these forces collectively determine the intensity of competition and profitability within an industry, which is often referred to as the industry's competitive structure.
4. Eliminate options that do not relate directly to competition within the industry, such as production technology, macroeconomic trends, and government regulations, since these are external factors or specific elements rather than the overall competitive framework.
5. Conclude that the five forces model helps one understand the competitive structure of an industry.