Porter's Five Forces analysis is used to assess what?

• A. Internal governance structures
• B. The bargaining power and competitive intensity within an industry
• C. Technical feasibility of products
• D. Employee performance metrics

Answer: (B)

Porter's Five Forces analysis focuses on the external forces that shape how profitable an industry can be. It evaluates the five drivers of industry structure: the bargaining power of suppliers, the bargaining power of buyers, the intensity of rivalry among existing competitors, the threat of new entrants, and the threat of substitutes. By weighing how strong each force is, you can gauge overall industry attractiveness and where profits are more or less likely to be preserved.

This framework is about external competition, not internal governance, not technical feasibility of products, and not measures of employee performance. Those areas are addressed by other analyses. So the analysis is best described as a method to assess the bargaining power and competitive intensity within an industry.