Question 1

Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business.

Accepted Answer

A) True 
 B)False  True

Question 2

Strategy formulation begins with an analysis of a firm's internal processes and capabilities.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is NOT one of the macroeconomic forces?

Accepted Answer

A)  Interest rates 
B)  Inflation rates 
C)  Cultural changes 
D)  Currency exchange rates 
E)  Growth rate of the economy 
A)  Interest rates 
B)  Inflation rates 
C)  Cultural changes 
D)  Currency exchange rates 
E)  Growth rate of the economy C

Question 4

Many beverage manufacturers are noticing that sales for bottled water and fruit-based beverages is increasing compared to carbonated drinks because customers are increasingly becoming health conscious. This change in customer preferences can be attributed to which of the following factors of the macroenvironment?

Accepted Answer

A)  Economic forces 
B)  Demographic forces 
C)  Technological forces 
D)  Political forces 
E)  Social forces 
A)  Economic forces 
B)  Demographic forces 
C)  Technological forces 
D)  Political forces 
E)  Social forces

Question 5

If economies of scale are an industry's primary entry barrier, a new entrant's major concern is:

Accepted Answer

A)  its inability to counter brand loyalty that customers have for established companies in the industry. 
B)  the inferior quality of its products. 
C)  its inability to match the innovation of the established firm. 
D)  its inability to produce in sufficient volume to match the cost advantages of established producers. 
E)  its inability to get buyers to switch to its product. 
A)  its inability to counter brand loyalty that customers have for established companies in the industry. 
B)  the inferior quality of its products. 
C)  its inability to match the innovation of the established firm. 
D)  its inability to produce in sufficient volume to match the cost advantages of established producers. 
E)  its inability to get buyers to switch to its product.

Question 6

Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about rivalry in the context of established companies is true?

Accepted Answer

A)  It significantly reduces the costs of established companies. 
B)  It squeezes profits out of an industry. 
C)  It enables companies to lower their spending on non-price-competitive strategies. 
D)  It forces companies to reduce prices when it is less intense. 
E)  It is unaffected by the demand conditions of an industry. 
A)  It significantly reduces the costs of established companies. 
B)  It squeezes profits out of an industry. 
C)  It enables companies to lower their spending on non-price-competitive strategies. 
D)  It forces companies to reduce prices when it is less intense. 
E)  It is unaffected by the demand conditions of an industry.

Question 8

Which of the following statements about growth industries is true?

Accepted Answer

A)  They typically have high barriers to entry. 
B)  They tend to be characterized by weak rivalry. 
C)  They are characterized by low demands. 
D)  They increase prices because customers are more aware of the industry's product. 
E)  They inhibit the development of distribution channels. 
A)  They typically have high barriers to entry. 
B)  They tend to be characterized by weak rivalry. 
C)  They are characterized by low demands. 
D)  They increase prices because customers are more aware of the industry's product. 
E)  They inhibit the development of distribution channels.

Question 9

Which of the following industry structures is made up of a several small or medium-sized companies, none of which is positioned to determine industry price?

Accepted Answer

A)  Fragmented industry 
B)  Consolidated industry 
C)  Oligopoly 
D)  Monopoly 
E)  Monopolistic competition 
A)  Fragmented industry 
B)  Consolidated industry 
C)  Oligopoly 
D)  Monopoly 
E)  Monopolistic competition

Question 10

Which of the following is NOT a determinant of the extent of rivalry among established companies?

Accepted Answer

A)  Industry competitive structure 
B)  Demand conditions 
C)  Cost conditions 
D)  The height of exit barriers in the industry 
E)  The bargaining power of buyers 
A)  Industry competitive structure 
B)  Demand conditions 
C)  Cost conditions 
D)  The height of exit barriers in the industry 
E)  The bargaining power of buyers

Question 11

A consolidated industry structure:

Accepted Answer

A)  consists of several small companies or medium-size companies, none of which is positioned to determine industry price. 
B)  constitutes a threat rather than an opportunity. 
C)  is dominated by a small number of companies or, in extreme cases, by just one company, and such companies often are positioned to determine industry prices. 
D)  provides no scope for an oligopoly to exist. 
E)  is characterized by low-entry barriers and commodity-type products. 
A)  consists of several small companies or medium-size companies, none of which is positioned to determine industry price. 
B)  constitutes a threat rather than an opportunity. 
C)  is dominated by a small number of companies or, in extreme cases, by just one company, and such companies often are positioned to determine industry prices. 
D)  provides no scope for an oligopoly to exist. 
E)  is characterized by low-entry barriers and commodity-type products.

Question 12

In Porter's Five Forces model, as each of the five forces grows stronger, it limits the ability of established companies to raise prices and earn greater profits.

Accepted Answer

A) True 
 B)False

Question 13

The bottled water industry created new competitors for Coca-Cola, but it did not change the basic industry boundaries.

Accepted Answer

A) True 
 B)False

Question 14

The bargaining power of an industry's suppliers is greater when:

Accepted Answer

A)  the supply industry is fragmented. 
B)  switching costs are minimal for companies because of little difference among products offered by different suppliers. 
C)  the industry buys in large quantities. 
D)  the product that suppliers sell has many substitutes and is not vital to the companies. 
E)  the industry is not an important customer to the suppliers. 
A)  the supply industry is fragmented. 
B)  switching costs are minimal for companies because of little difference among products offered by different suppliers. 
C)  the industry buys in large quantities. 
D)  the product that suppliers sell has many substitutes and is not vital to the companies. 
E)  the industry is not an important customer to the suppliers.

Question 15

An industry's buyers have high bargaining power when:

Accepted Answer

A)  they purchase in small quantities. 
B)  switching costs are low. 
C)  it is economically impossible for them to purchase an input from several companies at once. 
D)  the supply industry depends upon buyers for a very small percentage of its total orders. 
E)  the industry is a monopoly. 
A)  they purchase in small quantities. 
B)  switching costs are low. 
C)  it is economically impossible for them to purchase an input from several companies at once. 
D)  the supply industry depends upon buyers for a very small percentage of its total orders. 
E)  the industry is a monopoly.

Question 16

Sunshine Biscuits, a Kellogg company who make Cheez-Its, and Frito Lay who make Rold Gold Pretzels, are considered substitute products which increases competition and limits price.

Accepted Answer

A) True 
 B)False

Question 17

As a barrier to new entry, absolute cost advantages can be based on:

Accepted Answer

A)  continuous advertising of brand and company names, and product innovation achieved through research and development. 
B)  high product quality, service-oriented innovations, and good after-sales service. 
C)  cost reductions that arise from the mass production of standardized output. 
D)  the unique ability of established companies to spread fixed costs over a large volume. 
E)  superior production operations and processes due to accumulated experience, patents, or trade secrets. 
A)  continuous advertising of brand and company names, and product innovation achieved through research and development. 
B)  high product quality, service-oriented innovations, and good after-sales service. 
C)  cost reductions that arise from the mass production of standardized output. 
D)  the unique ability of established companies to spread fixed costs over a large volume. 
E)  superior production operations and processes due to accumulated experience, patents, or trade secrets.

Question 18

Which of the following is not a result of intense rivalry within an industry?

Accepted Answer

A)  Raised costs 
B)  Lowered prices 
C)  Reduced spending on non-price-competitive strategies 
D)  Threat to profitability 
E)  None of these are results of intense rivalry within an industry. 
A)  Raised costs 
B)  Lowered prices 
C)  Reduced spending on non-price-competitive strategies 
D)  Threat to profitability 
E)  None of these are results of intense rivalry within an industry.

Question 19

Which of the following is a benefit of innovation in an industry?

Accepted Answer

A)  It allows smaller companies the ability to compete with large, established companies by reducing entry barriers and lowering fixed costs of production. 
B)  It breaks the life cycle pattern and causes growth so rapid it causes stages to be skipped altogether. 
C)  It emphasizes the importance of industry structure. 
D)  It secures the profitability of strategic groups within an industry. 
E)  It increases the barriers to entry to reduce rivalry and competition. 
A)  It allows smaller companies the ability to compete with large, established companies by reducing entry barriers and lowering fixed costs of production. 
B)  It breaks the life cycle pattern and causes growth so rapid it causes stages to be skipped altogether. 
C)  It emphasizes the importance of industry structure. 
D)  It secures the profitability of strategic groups within an industry. 
E)  It increases the barriers to entry to reduce rivalry and competition.

Question 20

Interest rates have an impact on the sale of automobiles, appliances, and capital equipment. This represents a macroeconomic force.

Accepted Answer

A) True 
 B)False

Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business.

Strategy formulation begins with an analysis of a firm's internal processes and capabilities.

Which of the following is NOT one of the macroeconomic forces?

If economies of scale are an industry's primary entry barrier, a new entrant's major concern is:

Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry.

Which of the following statements about rivalry in the context of established companies is true?

Which of the following statements about growth industries is true?

Which of the following industry structures is made up of a several small or medium-sized companies, none of which is positioned to determine industry price?

Which of the following is NOT a determinant of the extent of rivalry among established companies?

A consolidated industry structure:

In Porter's Five Forces model, as each of the five forces grows stronger, it limits the ability of established companies to raise prices and earn greater profits.

The bottled water industry created new competitors for Coca-Cola, but it did not change the basic industry boundaries.

The bargaining power of an industry's suppliers is greater when:

An industry's buyers have high bargaining power when:

Sunshine Biscuits, a Kellogg company who make Cheez-Its, and Frito Lay who make Rold Gold Pretzels, are considered substitute products which increases competition and limits price.

As a barrier to new entry, absolute cost advantages can be based on:

Which of the following is not a result of intense rivalry within an industry?

Which of the following is a benefit of innovation in an industry?

Interest rates have an impact on the sale of automobiles, appliances, and capital equipment. This represents a macroeconomic force.

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

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Exam 2: External Analysis: the Identification of Opportunities and Threats

Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business.

Strategy formulation begins with an analysis of a firm's internal processes and capabilities.

Which of the following is NOT one of the macroeconomic forces?

If economies of scale are an industry's primary entry barrier, a new entrant's major concern is:

Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry.

Which of the following statements about rivalry in the context of established companies is true?

Which of the following statements about growth industries is true?

Which of the following industry structures is made up of a several small or medium-sized companies, none of which is positioned to determine industry price?

Which of the following is NOT a determinant of the extent of rivalry among established companies?

A consolidated industry structure:

In Porter's Five Forces model, as each of the five forces grows stronger, it limits the ability of established companies to raise prices and earn greater profits.

The bottled water industry created new competitors for Coca-Cola, but it did not change the basic industry boundaries.

The bargaining power of an industry's suppliers is greater when:

An industry's buyers have high bargaining power when:

Sunshine Biscuits, a Kellogg company who make Cheez-Its, and Frito Lay who make Rold Gold Pretzels, are considered substitute products which increases competition and limits price.

As a barrier to new entry, absolute cost advantages can be based on:

Which of the following is not a result of intense rivalry within an industry?

Which of the following is a benefit of innovation in an industry?

Interest rates have an impact on the sale of automobiles, appliances, and capital equipment. This represents a macroeconomic force.

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

Filters