Which of the following is a step in the 5 Forces template?

• A. Define the industry
• B. Benchmark budgets
• C. Create a mission statement
• D. Develop marketing slogan

Answer: (A)

Defining the industry boundaries is essential because Porter's Five Forces analysis rests on a clear scope. The five forces—threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing competitors—only make sense when you know what constitutes the industry being analyzed. If you don’t specify the industry (the products or services, geography, and time horizon included), you can misidentify who the competitors and substitutes are, leading to flawed insights about competitive pressure and profitability. Once the industry is defined, you can accurately assess each force within that context. The other options don’t fit this framework: benchmarking budgets is a financial management activity, a mission statement expresses purpose, and a marketing slogan is a branding element. None are steps in analyzing competitive structure using the Five Forces.