Exam 4: Rameworks for the Analysis of Industry Environments

Vertical integration occurs when a merger occurs between two firms that compete in different but related markets or industries.

Research has found that variations in average intraindustry profitability are approximately six times greater than the variations in average interindustry profitability.

An industry is an "entity" that is complete within itself.

Which of the following is a macroeconomic factor that may determine the performance of firms in certain industries?

How important is the influence of industry membership on firm performance?

An industry is a group of companies that ______________.

Structural or economic approaches to strategy cannot completely explain variations in firm performance.

Greater rivalry usually reduces average industry profitability because rivalry will either drive up prices or decrease the costs of doing business (as firms seek to add more features to their products and services without raising prices for those features)

MES is an acronym that stands for ______________.

High-definition televisions would represent which force in a Five Forces analysis of the movie theater industry?

What two factors appear to be most critical in determining the power of buyers?

In a SWOT analysis, managers seldom disagree about the classification of environmental phenomena as threats or opportunities.

If a SWOT analysis shows that a firm has both numerous environmental opportunities and substantial internal strengths, the firm should pursue a strategy focusing on ______________.

What reasons can be given to support the contention that the industry "structuralist" viewpoint is incomplete?

What limitations does the Five Forces Model have in regards to assisting the strategic thinking of managers?

The logic of the Five Forces model implies that, as the intensity of the forces increases, the industry environment becomes more hostile and overall industry profitability will decline.

If a SWOT analysis shows that a firm has both major environmental threats and substantial internal strengths, the firm should pursue a strategy focusing on ______________.

A firm operating at the level of MES has a serious cost disadvantage relative to any other firms that are already operating above the MES level for the industry.

Factors that reduce the threat of entry by new rivals into an industry include ______________.

Discuss the impact of each of the forces in the Five Forces Model on the conduct or behavior of firms in an industry.