Which framework is used to assess industry attractiveness and competitive intensity?

• A. PESTEL
• B. BCG Matrix
• C. Porter's Five Forces
• D. VRIO

Answer: (C)

Understanding industry attractiveness and competitive intensity comes from looking at how the structure of an industry shapes profitability. Porter's Five Forces does exactly that by examining five sources of pressure: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes, and the level of rivalry among existing competitors. By evaluating each force, you can see how easy or hard it is for firms to earn above-average profits in that industry. If the forces are generally weak, the industry tends to be more attractive; if they are strong, profitability is pressured and the industry is less attractive. This framework is specifically about external industry structure and its impact on competition and profitability. Other options focus on different angles: PESTEL analyzes macro-environmental factors, not the competitive forces within an industry; the BCG Matrix looks at a company's product portfolio in terms of market growth and share; VRIO assesses internal resources and capabilities for sustained advantage. So Porter's Five Forces is the best fit for assessing industry attractiveness and competitive intensity.