Question 1

The Internet is an example of a:

Accepted Answer

A)  technological force. 
B)  social force. 
C)  macroeconomic force. 
D)  demographic force. 
E)  global force. 
A)  technological force. 
B)  social force. 
C)  macroeconomic force. 
D)  demographic force. 
E)  global force. A

Question 2

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  True

Question 3

When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits.

Accepted Answer

A) True 
 B)False  False

Question 4

Describe one major limitation of each of the following models for competitive analysis: the five forces model, the strategic groups model, and the industry life cycle model. Does the existence of these limitations mean that the models are not useful? Why or why not?

Accepted Answer

All three of these models fail to accoun

Question 5

Substitute products are not a threat if a company is the market leader.

Accepted Answer

A) True 
 B)False

Question 6

Porter's Five Forces model did not recognize one force, which is:

Accepted Answer

A)  the power of complement providers. 
B)  the risk of entry by potential competitors. 
C)  the intensity of rivalry among established companies within an industry. 
D)  the bargaining power of suppliers. 
E)  the threat of substitutes. 
A)  the power of complement providers. 
B)  the risk of entry by potential competitors. 
C)  the intensity of rivalry among established companies within an industry. 
D)  the bargaining power of suppliers. 
E)  the threat of substitutes.

Question 7

Consider the macroenvironment facing a large, international airline headquartered in the United States (such as American or United). Give at least three examples of important trends or events from each of the five segments of the airline's macroenvironment (macroeconomic, technological, demographic, social, political, and legal), and explain whether each represents a threat or an opportunity for the firm.

Accepted Answer

The airline industry benefits from low i

Question 8

Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true about potential competitors in an industry?

Accepted Answer

A)  They threaten the profitability of established companies. 
B)  They are usually encouraged by established companies. 
C)  They find it easier to enter an industry when the entry barriers are high. 
D)  They find it easier to enter an industry when established companies have economies of scale. 
E)  They usually have an absolute cost advantage over established companies. 
A)  They threaten the profitability of established companies. 
B)  They are usually encouraged by established companies. 
C)  They find it easier to enter an industry when the entry barriers are high. 
D)  They find it easier to enter an industry when established companies have economies of scale. 
E)  They usually have an absolute cost advantage over established companies.

Question 10

Julian was asked to examine the demographic forces facing his employer, a clothing manufacturer. Which of the following factors is Julian most likely to examine?

Accepted Answer

A)  Government regulations 
B)  Inflation 
C)  Manufacturing technology 
D)  Age of the population 
E)  Society's growing interest in exercise 
A)  Government regulations 
B)  Inflation 
C)  Manufacturing technology 
D)  Age of the population 
E)  Society's growing interest in exercise

Question 11

A consolidated industry structure:

Accepted Answer

A)  consists of a large number of small companies. 
B)  can be seen in agriculture, dry cleaning, health clubs, and real estate brokerage. 
C)  consists of few companies that are in a position to determine industry price. 
D)  provides no scope for oligopoly to exist. 
E)  is characterized by low-entry barriers and commodity-type products. 
A)  consists of a large number of small companies. 
B)  can be seen in agriculture, dry cleaning, health clubs, and real estate brokerage. 
C)  consists of few companies that are in a position to determine industry price. 
D)  provides no scope for oligopoly to exist. 
E)  is characterized by low-entry barriers and commodity-type products.

Question 12

Which of the following is true of growth industries?

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 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

Entry barriers in embryonic industries tend to be based on:

Accepted Answer

A)  brand loyalty. 
B)  economies of scale. 
C)  absolute cost advantages. 
D)  regulatory advantage. 
E)  technological knowhow. 
A)  brand loyalty. 
B)  economies of scale. 
C)  absolute cost advantages. 
D)  regulatory advantage. 
E)  technological knowhow.

Question 15

Suppliers in an industry are most powerful when:

Accepted Answer

A)  there are few substitutes for the products that they sell. 
B)  switching costs are low. 
C)  companies in the industry threaten to enter the suppliers' industry. 
D)  their profitability is significantly affected by the purchases of companies in a particular industry. 
E)  they refrain from entering their customers' industry because of lack of resources. 
A)  there are few substitutes for the products that they sell. 
B)  switching costs are low. 
C)  companies in the industry threaten to enter the suppliers' industry. 
D)  their profitability is significantly affected by the purchases of companies in a particular industry. 
E)  they refrain from entering their customers' industry because of lack of resources.

Question 16

Mobility barriers:

Accepted Answer

A)  allow industries to change their strategy and compete in that strategic group. 
B)  inhibit the movement of companies between strategic groups in an industry. 
C)  inhibit companies from shifting between suppliers for the raw materials. 
D)  are factors that operate outside of an industry. 
E)  exclude the barriers to entry into a group and the barriers to exit from a company's existing group. 
A)  allow industries to change their strategy and compete in that strategic group. 
B)  inhibit the movement of companies between strategic groups in an industry. 
C)  inhibit companies from shifting between suppliers for the raw materials. 
D)  are factors that operate outside of an industry. 
E)  exclude the barriers to entry into a group and the barriers to exit from a company's existing group.

Question 17

The level of industry demand:

Accepted Answer

A)  has little effect on competition in the industry. 
B)  is one of the determinants of the intensity of rivalry in the industry. 
C)  increases when customers exit a marketplace. 
D)  does not impact the market share that established companies hold. 
E)  decreases the rivalry among established companies, when in decline. 
A)  has little effect on competition in the industry. 
B)  is one of the determinants of the intensity of rivalry in the industry. 
C)  increases when customers exit a marketplace. 
D)  does not impact the market share that established companies hold. 
E)  decreases the rivalry among established companies, when in decline.

Question 18

As an industry enters the shakeout stage:

Accepted Answer

A)  rivalry among companies declines. 
B)  demand grows at a high rate. 
C)  prices of products increase. 
D)  excess productive capacity emerges. 
E)  new entrants come into the market. 
A)  rivalry among companies declines. 
B)  demand grows at a high rate. 
C)  prices of products increase. 
D)  excess productive capacity emerges. 
E)  new entrants come into the market.

Question 19

The more commodity-like that an industry's product is, the lower the intensity of any price war that may develop.

Accepted Answer

A) True 
 B)False

Question 20

Economies of scale can arise from:

Accepted Answer

A)  cost reductions gained through decreased production. 
B)  high prices on bulk purchases of raw material inputs and component parts. 
C)  an advantage gained by spreading fixed production costs over a large production volume. 
D)  increased spending on marketing and advertising activities. 
E)  poor production operations. 
A)  cost reductions gained through decreased production. 
B)  high prices on bulk purchases of raw material inputs and component parts. 
C)  an advantage gained by spreading fixed production costs over a large production volume. 
D)  increased spending on marketing and advertising activities. 
E)  poor production operations.

The Internet is an example of a:

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

When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits.

Describe one major limitation of each of the following models for competitive analysis: the five forces model, the strategic groups model, and the industry life cycle model. Does the existence of these limitations mean that the models are not useful? Why or why not?

Substitute products are not a threat if a company is the market leader.

Porter's Five Forces model did not recognize one force, which is:

Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors.

Which of the following statements is true about potential competitors in an industry?

Julian was asked to examine the demographic forces facing his employer, a clothing manufacturer. Which of the following factors is Julian most likely to examine?

A consolidated industry structure:

Which of the following is true of growth industries?

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

Entry barriers in embryonic industries tend to be based on:

Suppliers in an industry are most powerful when:

Mobility barriers:

The level of industry demand:

As an industry enters the shakeout stage:

The more commodity-like that an industry's product is, the lower the intensity of any price war that may develop.

Economies of scale can arise from:

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

Internal Analysis: Resources and Competitive Advantage

Building 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 Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters

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

The Internet is an example of a:

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

When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits.

Describe one major limitation of each of the following models for competitive analysis: the five forces model, the strategic groups model, and the industry life cycle model. Does the existence of these limitations mean that the models are not useful? Why or why not?

Substitute products are not a threat if a company is the market leader.

Porter's Five Forces model did not recognize one force, which is:

Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors.

Which of the following statements is true about potential competitors in an industry?

Julian was asked to examine the demographic forces facing his employer, a clothing manufacturer. Which of the following factors is Julian most likely to examine?

A consolidated industry structure:

Which of the following is true of growth industries?

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

Entry barriers in embryonic industries tend to be based on:

Suppliers in an industry are most powerful when:

Mobility barriers:

The level of industry demand:

As an industry enters the shakeout stage:

The more commodity-like that an industry's product is, the lower the intensity of any price war that may develop.

Economies of scale can arise from:

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

Internal Analysis: Resources and Competitive Advantage

Building 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 Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters