Final answer:
The statement is false. High levels of all five forces generally make an industry less attractive by indicating a highly competitive market, which is challenging for businesses to maintain high profits. Increased competition driven by high profits can lower the overall attractiveness of the industry.
Step-by-step explanation:
The statement '"High" in all the five forces means the industry is easy to make profit and thus attractive for businesses.' is false. The five forces, as defined by Michael Porter, help to assess an industry's attractiveness and long-term profitability. The forces include the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and the intensity of competitive rivalry.
When these forces are high, it indicates a challenging competitive environment, which could make it harder for companies to earn sustained profits. For example, high threat of new entrants signifies that new competitors can easily join the industry, increasing competition. High bargaining power of buyers means that customers can demand lower prices or higher quality, squeezing profit margins. Therefore, an industry with high levels of all five forces is generally considered less attractive for businesses, as it is harder for companies to maintain high profit levels.
Increased industry profits generally encourage new entry, which can lead to more competition and eventually drive profits down. Economies of scale and brand reputation can act as barriers to entry, making an industry potentially more attractive. All these considerations form a dynamic environment wherein companies strive to find a balance between competitive pressures and profitability.