In the Five Forces Model, the more that companies compete against one another for customers, the lower the level of profits is likely to be for that industry.
Step-by-step explanation:
Five Forces model is a model used in the industry and organization to identify and analyze the competitive forces and strength and weakness of the firm.
Industries frequently use five forces analysis to determine corporate strategy. The five forces that are analyzed by the five forces models are as follows:
• Threat of new market players
• Threat of substitute products
• Power of customers
• Power of suppliers
• Industry rivalry
The model also reveals that profit of the industry will be lowered if there is lot of competition between the companies for the same product.