- A.Concentrating on a narrow segment — geography, customer type, or product line — and applying cost or differentiation within it.
- B.Michael Porter's framework for analyzing industry attractiveness across five competitive forces — rivalry, suppliers, buyers, new entrants, and substitutes. ✓
- C.Kim & Mauborgne's framework for creating uncontested market space by reducing/eliminating competitive factors and raising/creating new ones — value innovation, not competition.
- D.Michael Porter's framework for analyzing industry attractiveness across five competitive forces — rivalry, suppliers, buyers, new entrants, and substitutes.
Porter's Five Forces is michael Porter's framework for analyzing industry attractiveness across five competitive forces — rivalry, suppliers, buyers, new entrants, and substitutes. The other options describe related but distinct concepts in Strategic Frameworks — see the deep-dive guide for the full distinction.
How to think about questions like this
Industry structure explains 30–50% of firm profitability variation. Questions like this test whether you can distinguish Porter's Five Forces from neighboring concepts. The most common trap is choosing a closely-related concept that sounds similar but applies in a different context.
When you see a definition question on an exam, do two things: (1) translate the question into your own words, then (2) generate the answer in your own words before reading the options. This avoids the cognitive bias of recognizing a familiar phrase as correct just because it is familiar.