Question 1

Rivalry tends to be fierce among an industry's competitors if exit barriers in the industry are low.

Accepted Answer

A) True 
 B)False

Question 2

PESTEL reflects the names of the six segments of the general environment: political, _____, environmental, and legal.

Accepted Answer

A)  ecological, strategic, technical 
B)  ecological, social, technological 
C)  economic, strategic, technical 
D)  economic, social, technological 
E)  ecological, strategic, technological 
A)  ecological, strategic, technical 
B)  ecological, social, technological 
C)  economic, strategic, technical 
D)  economic, social, technological 
E)  ecological, strategic, technological

Question 3

Forward vertical integration involves a buyer entering the industry that it purchases goods or services from.

Accepted Answer

A) True 
 B)False

Question 4

The purpose of Porter's five forces analysis is to identify the factors that affect the profit potential of an industry.

Accepted Answer

A) True 
 B)False

Question 5

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

Accepted Answer

A)  differentiation among existing suppliers is high. 
B)  the suppliers' industry is highly fragmented. 
C)  existing suppliers lack economies of scale. 
D)  suppliers' goods or services cannot be substituted effectively. 
E)  cost advantages independent of size are negligible. 
A)  differentiation among existing suppliers is high. 
B)  the suppliers' industry is highly fragmented. 
C)  existing suppliers lack economies of scale. 
D)  suppliers' goods or services cannot be substituted effectively. 
E)  cost advantages independent of size are negligible.

Question 6

Michael Porter's five forces analysis is an important tool:

Accepted Answer

A)  that considers a firm's strengths and weaknesses along with the opportunities and threats that exist in the firm's environment. 
B)  for executives to analyze strategic groups in order to understand gaps in the industry that represent untapped opportunities. 
C)  for analyzing how much profit potential exists in an industry. 
D)  for evaluating profit potential of an organization's various business units or product lines. 
E)  for organizing factors within the general environment and identifying how these factors influence industries and the firms within them. 
A)  that considers a firm's strengths and weaknesses along with the opportunities and threats that exist in the firm's environment. 
B)  for executives to analyze strategic groups in order to understand gaps in the industry that represent untapped opportunities. 
C)  for analyzing how much profit potential exists in an industry. 
D)  for evaluating profit potential of an organization's various business units or product lines. 
E)  for organizing factors within the general environment and identifying how these factors influence industries and the firms within them.

Question 7

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

Accepted Answer

A)  differentiation among existing suppliers is high. 
B)  access to distribution channels is limited. 
C)  existing suppliers lack economies of scale. 
D)  the suppliers' industry is highly concentrated. 
E)  cost advantages independent of size are negligible. 
A)  differentiation among existing suppliers is high. 
B)  access to distribution channels is limited. 
C)  existing suppliers lack economies of scale. 
D)  the suppliers' industry is highly concentrated. 
E)  cost advantages independent of size are negligible.

Question 8

New entrants are more likely to join an industry if:

Accepted Answer

A)  differentiation among existing competitors is low. 
B)  access to distribution channels is limited. 
C)  switching costs for consumers are high. 
D)  capital requirements to enter the industry are high. 
E)  expected retaliation from existing competitors is high. 
A)  differentiation among existing competitors is low. 
B)  access to distribution channels is limited. 
C)  switching costs for consumers are high. 
D)  capital requirements to enter the industry are high. 
E)  expected retaliation from existing competitors is high.

Question 9

When unemployment rises, discretionary income plummets. That hurts businesses selling costly but non-essential goods. This example represents the _____ segment of PESTEL analysis.

Accepted Answer

A)  political 
B)  economic 
C)  social 
D)  technological 
E)  environmental 
A)  political 
B)  economic 
C)  social 
D)  technological 
E)  environmental

Question 10

When a buyer decides to enter its supplier's business, the strategy is referred to as _____.

Accepted Answer

A)  forward horizontal integration 
B)  backward vertical integration 
C)  horizontal diversification 
D)  backward horizontal integration 
E)  forward vertical integration 
A)  forward horizontal integration 
B)  backward vertical integration 
C)  horizontal diversification 
D)  backward horizontal integration 
E)  forward vertical integration

Question 11

Rivalry tends to be fierce among an industry's competitors if the growth rate of demand for the industry's offerings is high.

Accepted Answer

A) True 
 B)False

Question 12

How is the strategic groups analysis different from Porter's five forces analysis?

Accepted Answer

Porter's five forces analysis examines t

Question 13

Why is understanding the nature of strategic groups within an industry important?

Accepted Answer

Understanding the nature of strategic gr

Question 14

Viable substitutes are available in all industries.

Accepted Answer

A) True 
 B)False

Question 15

Rivalry between competitors of an industry tends to be fierce when:

Accepted Answer

A)  exit barriers in the industry are low. 
B)  fixed costs in the industry are low. 
C)  competitors are not differentiated from each other. 
D)  competition is based on the uniqueness of the industry's offerings. 
E)  the growth rate of demand for the industry's offerings is high. 
A)  exit barriers in the industry are low. 
B)  fixed costs in the industry are low. 
C)  competitors are not differentiated from each other. 
D)  competition is based on the uniqueness of the industry's offerings. 
E)  the growth rate of demand for the industry's offerings is high.

Question 16

The analysis of strategic groups can reveal gaps in the industry that represent untapped opportunities.

Accepted Answer

A) True 
 B)False

Question 17

Rivalry in fragmented industries tends to become bitter and fierce.

Accepted Answer

A) True 
 B)False

Question 18

Give an example each of forward vertical integration and backward vertical integration.

Accepted Answer

Students' examples may vary.
Forward ver

Question 19

The environmental segment involves the physical conditions within which organizations operate.

Accepted Answer

A) True 
 B)False

Question 20

The likelihood of new entrants joining an industry is low if access to distribution channels is limited because:

Accepted Answer

A)  new entrants struggle to match incumbents' prices. 
B)  this discourages customers from buying a new entrant's offerings. 
C)  new entrants struggle to gather enough cash to get started. 
D)  each incumbent has a group of loyal customers that enjoy its unique features. 
E)  new entrants struggle to get their offerings to customers. 
A)  new entrants struggle to match incumbents' prices. 
B)  this discourages customers from buying a new entrant's offerings. 
C)  new entrants struggle to gather enough cash to get started. 
D)  each incumbent has a group of loyal customers that enjoy its unique features. 
E)  new entrants struggle to get their offerings to customers.

Rivalry tends to be fierce among an industry's competitors if exit barriers in the industry are low.

PESTEL reflects the names of the six segments of the general environment: political, _____, environmental, and legal.

Forward vertical integration involves a buyer entering the industry that it purchases goods or services from.

The purpose of Porter's five forces analysis is to identify the factors that affect the profit potential of an industry.

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

Michael Porter's five forces analysis is an important tool:

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

New entrants are more likely to join an industry if:

When unemployment rises, discretionary income plummets. That hurts businesses selling costly but non-essential goods. This example represents the _____ segment of PESTEL analysis.

When a buyer decides to enter its supplier's business, the strategy is referred to as _____.

Rivalry tends to be fierce among an industry's competitors if the growth rate of demand for the industry's offerings is high.

How is the strategic groups analysis different from Porter's five forces analysis?

Why is understanding the nature of strategic groups within an industry important?

Viable substitutes are available in all industries.

Rivalry between competitors of an industry tends to be fierce when:

The analysis of strategic groups can reveal gaps in the industry that represent untapped opportunities.

Rivalry in fragmented industries tends to become bitter and fierce.

Give an example each of forward vertical integration and backward vertical integration.

The environmental segment involves the physical conditions within which organizations operate.

The likelihood of new entrants joining an industry is low if access to distribution channels is limited because:

Mastering Strategy: Art and Science

Leading Strategically

Managing Company Resources

Selecting Business-Level Strategies

Supporting the Business-Level Strategy: Competitive and Cooperative Moves

Competing in International Markets

Selecting Corporate-Level Strategies

Executing Strategy Through Organizational Design

Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility

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Exam 3: Evaluating the External Environment

Rivalry tends to be fierce among an industry's competitors if exit barriers in the industry are low.

PESTEL reflects the names of the six segments of the general environment: political, _____, environmental, and legal.

Forward vertical integration involves a buyer entering the industry that it purchases goods or services from.

The purpose of Porter's five forces analysis is to identify the factors that affect the profit potential of an industry.

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

Michael Porter's five forces analysis is an important tool:

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

New entrants are more likely to join an industry if:

When unemployment rises, discretionary income plummets. That hurts businesses selling costly but non-essential goods. This example represents the _____ segment of PESTEL analysis.

When a buyer decides to enter its supplier's business, the strategy is referred to as _____.

Rivalry tends to be fierce among an industry's competitors if the growth rate of demand for the industry's offerings is high.

How is the strategic groups analysis different from Porter's five forces analysis?

Why is understanding the nature of strategic groups within an industry important?

Viable substitutes are available in all industries.

Rivalry between competitors of an industry tends to be fierce when:

The analysis of strategic groups can reveal gaps in the industry that represent untapped opportunities.

Rivalry in fragmented industries tends to become bitter and fierce.

Give an example each of forward vertical integration and backward vertical integration.

The environmental segment involves the physical conditions within which organizations operate.

The likelihood of new entrants joining an industry is low if access to distribution channels is limited because:

Mastering Strategy: Art and Science

Leading Strategically

Managing Company Resources

Selecting Business-Level Strategies

Supporting the Business-Level Strategy: Competitive and Cooperative Moves

Competing in International Markets

Selecting Corporate-Level Strategies

Executing Strategy Through Organizational Design

Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility

Filters