Final answer:
The five forces model is used to evaluate industry characteristics and determine the potential level and sustainability of industry competition.
Step-by-step explanation:
The five forces model is used to evaluate industry characteristics and determine the potential level and sustainability of industry competition.
The five forces in the model include:
- Threat of new entrants: the possibility of new competitors entering the industry.
- Bargaining power of suppliers: the influence suppliers have in setting prices and terms.
- Bargaining power of buyers: the influence buyers have in negotiating prices and terms.
- Threat of substitute products or services: the availability of alternative products or services that could meet similar needs.
- Rivalry among existing competitors: the intensity of competition among existing firms in the industry.
By analyzing these forces, businesses can assess the attractiveness and competitiveness of an industry.