Exam 2: Evaluating a Firms External Environment

All other things being equal, which of the following would lead to lower barriers to entry in an industry?

Incumbent firms may have a whole range of cost advantages compared to new competitors.

Product innovation is an effort to refine and improve a firm's current processes.

The aging of the "baby boomer" generation in American society is an example of a demographic trend.

Identify and define the three elements of the S-C-P model.

Brand identification and customer loyalty serve as entry barriers because new entrants not only have to absorb the standard costs associated with starting production in a new industry, but also have to absorb the costs associated with overcoming an incumbent firm's differentiation advantages.

Which of the following attributes makes suppliers a stronger threat?

________ are resources required to successfully compete in an industry.

Industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies are called ________ industries.

A firm's supplier poses a greater threat if the supplier's industry has a large number of firms, none of which dominate the supplying industry, than if the supplier's industry is dominated by a small number of firms.

The threat of existing competition tends to be high in an industry when firms are able to meaningfully differentiate their products.

Firms in a declining industry that engage in a long, systematic phased withdrawal from the industry, extracting as much value as possible during the withdrawal period, are following a(n) ________ strategy.

Buyers tend to have less power when

Firms pursuing a harvest strategy in a declining industry do not expect to remain in the industry over the long term.

________ make a wide variety of raw materials, labor and other critical assets available to firms.

The threat of entry in an industry depends on the cost of entry, and the cost of entry, in turn, depends upon the existence and "height" of barriers to entry.

Discuss the difference between a company's existing direct competitors and its substitutes and discuss the role substitutes play in an industry.

Identify the four types of competition, the attributes of each type and the expected performance under each.

Learning-curve cost advantages are present when the cost of production falls with the cumulative volume of production.