Question

Porter's "Five Forces" framework includes: Bargaining Power of Customers, Bargaining Power of Suppliers, Threat from New Entrants, Threat from substitutes, and Rivalry of Existing Competitors. Which force might be included as a sixth force?

Answer 1

The threat of complementary products or services could be included as a sixth force in Porter's Five Forces framework.

Step-by-step explanation:

The sixth force that could be included in Porter's Five Forces framework is the threat of complementary products or services.

This refers to products or services that are not direct substitutes but still affect the demand for the industry's products. For example, if a company produces smartphones, the availability of apps and accessories would have an impact on the demand for their products.

Including the threat of complementary products or services as a sixth force allows businesses to consider the broader market dynamics and the potential impacts on their industry.

By analyzing this force, companies can better understand the factors that influence customer preferences and overall demand.