Exam 3: Evaluating the External Environment

Suppliers tend to be less powerful if there are no effective substitutes for what the supplier group provides.

Which of the following segments of PESTEL analysis includes elements such as inflation rates, unemployment rates, and levels of disposable income?

Rivalry in _____ industries tends to become bitter and fierce.

Bitter rivalry between an industry's competitors can lead to increase in prices of their products or services, thereby harming consumers.

_____ is one of the five forces of Michael Porter's five forces analysis.

A strategy that involves a supplier entering the industry that it supplies inputs to is referred to as:

Buyers are less powerful when they face little or no switching costs in changing vendors.

Which of the following is an example of backward vertical integration?

Farmers rely heavily on cheap labor provided by illegal immigrants. A tightening of the immigration policy would reduce their profit margins and potentially increase the prices of agricultural products. For these farmers, this aspect of illegal immigration represents the _____ segment of PESTEL analysis.

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

Which of the following conditions is most likely to cause fierce rivalry between competitors of an industry?

Bitter rivalry between an industry's competitors is especially detrimental to the competing firms if their competition is based on unique features of their products or services.

As buyers, large companies like Walmart have the power to insist on price concessions because their sales volumes are so high.

According to the Five Force Analysis, if a firm is to make more profit, it must take that profit from a rival, a supplier, or a buyer.

The likelihood of new entrants joining an industry is high if differentiation among existing competitors is high.

The general environment, a component of the environment of an organization, is also called the:

Which of the following groups consists of a set of industry competitors that have similar characteristics to each other but differ in important ways from the members of other groups?

The likelihood of new entrants joining an industry is low if switching costs are high because:

Textbook publishers can charge high prices because students enrolled in a class must purchase the specific book that the professor has selected. Used copies are sometimes a lower-cost option, but textbook publishers have cleverly worked to undermine the used textbook market by releasing new editions after very short periods of time. According to Porter what "force" do used books industry represent?

What is the purpose of conducting Michael Porter's five forces analysis? Describe the five forces that such an analysis focuses on.