The important lessons learned from the Five Forces Model are that the stronger the forces, the lower the industry$$s ability to earn above$-$average profits and the lower the firm$$s ability to gain and sustain a competitive advantage. Conversely, the weaker the forces, the greater the industry$$s ability to earn above$-$average profits and the greater the firm$$s ability to gain and sustain competitive advantage. Therefore, a company$$s strategic leaders need to craft a strategic position that leverages weak forces into opportunities and mitigates strong forces that are potential threats to the firm$$s ability to gain and sustain a competitive advantage.

The Five Forces model is useful in understanding an industry$$s profit potential but much like other static models, it provides only a point in time view of a continuously changing industry. It$$s difficult to determine the speed of change within an industry or the rate of innovation. As a result, strategic leaders must repeat their analysis frequently to create a more accurate picture of their industry and the industry dynamics.

This exercise is important because it explains the difference between industry dynamics and industry convergence. As a manager, you need to understand the industry dynamics and the ways in which you can position your firm to mitigate the threat of strong competitive forces to earn above average profits.

The goal of this exercise is to demonstrate your understanding of Industry dynamics and the ways in which companies can reconfigure the industry structure to meet these changing dynamics.

After reading the relevant content in Chapter $3,$ complete the activity that follows.

$4$b$.$ The March $2020$ agreement between Pfizer and $...$

The March $2020$ agreement between Pfizer and BioNTech to jointly develop a COVID$-19$ vaccine is an example of

Multiple Choice

consolidation.

coordination.

co$-$opetition.

cooperation.

competition