Using the five-forces model of competition involves how many steps?

The correct choice indicates that using the five-forces model of competition involves three steps. This model, developed by Michael Porter, is a tool to analyze the competitive forces within an industry and understand the dynamics that affect profitability.

The process typically involves:

1. Identifying the Competitive Forces: This step requires analyzing the five key forces that shape competition within a market: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and the intensity of competitive rivalry among existing firms.

2. Assessing the Strength of Each Force: After identifying these forces, the next step involves evaluating how strong each force is within the context of the industry. This analysis helps determine the overall competitive pressure within the market.

3. Developing Strategic Implications: The final step entails interpreting the analysis to draw conclusions about the competitive landscape and formulating strategies based on the findings. Businesses can then make informed decisions on how to enhance their competitive position.

Understanding these steps is crucial for practitioners in developing strategies that leverage the dynamics of competition and improve their positioning within the market. The option indicating three steps accurately reflects this structured approach in utilizing the five-forces model.