Question 1: Identify the five competitive forces (Porter\'s Five Forces) that de

Question

Question 1: Identify the five competitive forces (Porter's Five Forces) that determine industry profitability. Are some industries more profitable than others? If so, give an example of a profitable industry and a not-profitable industry.

Question 2: Choose a healthcare related industry. Analyze the industry in terms of Porter's Five Forces.

Question 3: After viewing the above video on health care costs, are health care costs high in the United States? Explain your view of this issue.

http://www.huffingtonpost.com/2014/04/17/health-care-costs_n_5160819.html (Links to an external site for Q3.)

Explanation / Answer

Porter's Five Forces is a business analysis model that helps to explain why different industries are able to sustain different levels of profitability. The model was originally published in Michael Porter's book, "Competitive Strategy: Techniques for Analyzing Industries and Competitors" in 1980. The model is widely used to analyze the industry structure of a company as well as its corporate strategy. Porter identified five undeniable forces that play a part in shaping every market and industry in the world. The forces are frequently used to measure competition intensity, attractiveness and profitability of an industry or market. These forces are:

1. Competition in the industry;

2. Potential of new entrants into the industry;

3. Power of suppliers;

4. Power of customers;

5. Threat of substitute products.

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