Which framework analyzes threats of new entrants, supplier power, substitutes, buyer power, and rivalry?

• A. VRIO analysis
• B. Intangible asset
• C. Cost leadership
• D. Porter's Five Forces Analysis

Answer: (D)

Porter's Five Forces Analysis looks at five competitive forces that shape industry profitability: the threat of new entrants, supplier power, substitutes, buyer power, and rivalry among existing competitors. This framework helps you see how attractive an industry is by revealing how easily new competitors can enter, how much leverage suppliers or buyers have over prices, how readily customers can switch to alternatives, and how intense the competition already is. Understanding these forces clarifies why a firm might pursue barriers to entry, stronger supplier or customer relationships, product differentiation, or cost advantages to improve its position. Other options describe different ideas: VRIO analysis focuses on a company's internal resources and capabilities for sustained advantage; intangible asset refers to non-physical resources; cost leadership is a strategic position, not a framework for analyzing industry structure.