Question 1

Factors that influence the bargaining strength and leverage of buyers include which elements?

Accepted Answer

Competitive pressures from buyers increase when they have strong bargaining power and are price sensitive. Buyer bargaining power is stronger when:
•Buyer demand is weak in relation to industry supply.
•The industry's products are standardized or undifferentiated.
•Buyer costs of switching to competing products are low.
•Buyers are large and few in number relative to the number of industry sellers.
•Buyers pose a credible threat of integrating backward into the business of sellers.
•Buyers are well informed about the quality, prices, and costs of sellers.
•Buyers have the ability to postpone purchases.
Buyers are price sensitive and increase competitive pressures when:
•Buyers earn low profits or low income.
•The product represents a significant fraction of their purchases.
Competitive pressures from buyers decrease and become a weaker force under the opposite conditions.

Question 2

Which of the following is not a common type of driving force?

Accepted Answer

A) reductions in uncertainty and business risk 
B) changing societal concerns, attitudes, and lifestyles 
C) diffusion of technical know-how across companies and countries 
D) increasing efforts to collaborate closely with suppliers 
E) advances in technology and manufacturing process innovation 
A) reductions in uncertainty and business risk 
B) changing societal concerns, attitudes, and lifestyles 
C) diffusion of technical know-how across companies and countries 
D) increasing efforts to collaborate closely with suppliers 
E) advances in technology and manufacturing process innovation D

Question 3

What are the five competitive forces that comprise the five forces model of competition?

Accepted Answer

The five forces framework holds that competitive pressures on companies within an industry come from five sources. These include (1)competition from rival sellers, (2)competition from potential new entrants to the industry, (3)competition from producers of substitute products, (4)supplier bargaining power, and (5)customer bargaining power.

Question 4

Buyers are in position to exert strong bargaining power in dealing with sellers when

Accepted Answer

A) their costs to switch to competing brands or to substitute products are relatively high. 
B) a particular seller's product delivers quality or performance that is very important to the buyer and is not matched by other brands. 
C) they buy the product infrequently or in small quantities and are not particularly well-informed about sellers' products, prices, and costs. 
D) buyer demand is growing rapidly. 
E) buyers are price sensitive because the product represents a significant portion of their purchasing budget. 
A) their costs to switch to competing brands or to substitute products are relatively high. 
B) a particular seller's product delivers quality or performance that is very important to the buyer and is not matched by other brands. 
C) they buy the product infrequently or in small quantities and are not particularly well-informed about sellers' products, prices, and costs. 
D) buyer demand is growing rapidly. 
E) buyers are price sensitive because the product represents a significant portion of their purchasing budget.

Question 5

For a complete assessment of the driving forces in an industry, three steps are required. Briefly explain those steps.

Accepted Answer

Driving-forces analysis has three steps:

Question 6

The key success factors in an industry

Accepted Answer

A) are those competitive factors that most affect industry members' abilities to prosper in the marketplace-the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss. 
B) are determined by the industry's driving forces, which are essential to surviving and thriving in the industry. 
C) hinge on how many different strategic groups the industry has operating within the industry and their level of profitability and sustainable advantages. 
D) depend on how many rivals are trying to move from one strategic group to another without losing momentum. 
E) are a function of such considerations as how many firms are in the industry, how many have market shares above 5 percent, and whether the business models being used are similar or diverse. 
A) are those competitive factors that most affect industry members' abilities to prosper in the marketplace-the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss. 
B) are determined by the industry's driving forces, which are essential to surviving and thriving in the industry. 
C) hinge on how many different strategic groups the industry has operating within the industry and their level of profitability and sustainable advantages. 
D) depend on how many rivals are trying to move from one strategic group to another without losing momentum. 
E) are a function of such considerations as how many firms are in the industry, how many have market shares above 5 percent, and whether the business models being used are similar or diverse.

Question 7

A strategically relevant political factor in the macro-environment that will influence the performance of all firms across the board is most likely to be

Accepted Answer

A) the strength of the federal banking system. 
B) the exogenous forces related to the general environmental demand. 
C) social factors that could fuel a political agenda and create greater transparency. 
D) bailouts and energy policies that are industry specific. 
E) tax policy, fiscal policy, and tariffs providing impetus for antitrust matters. 
A) the strength of the federal banking system. 
B) the exogenous forces related to the general environmental demand. 
C) social factors that could fuel a political agenda and create greater transparency. 
D) bailouts and energy policies that are industry specific. 
E) tax policy, fiscal policy, and tariffs providing impetus for antitrust matters.

Question 8

Two friends of yours are considering opening a pizza parlor and delivery service within walking distance of your campus. They have asked you to help them identify the competitive pressures stemming from the threat that new firms will enter the pizza segment of the restaurant industry. What information can you give them?

Accepted Answer

Threat of entry is a stronger force when

Question 9

Which of the following is not a factor that causes buyer bargaining power to be stronger?

Accepted Answer

A) Some buyers are a threat to integrate backward into the business of sellers and become an important competitor. 
B) Buyers are small and numerous relative to sellers. 
C) Buyers have considerable discretion over whether and when they purchase the product. 
D) Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. 
E) The costs incurred by buyers in switching to competing brands or to substitute products are relatively low. 
A) Some buyers are a threat to integrate backward into the business of sellers and become an important competitor. 
B) Buyers are small and numerous relative to sellers. 
C) Buyers have considerable discretion over whether and when they purchase the product. 
D) Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. 
E) The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.

Question 10

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

Accepted Answer

Competitive pressures from substitutes a

Question 11

The biggest strategy-shaping impact on on-demand transportation providers such as Uber and Lyft is most likely to be

Accepted Answer

A) Yellow Cab companies launching mobile app campaigns for community-connect and awareness. 
B) Amazon launching a mobile delivery service via drones. 
C) Apple launching a global network of driverless cars, buses, and trucks on demand via a mobile app. 
D) Tesla and ZipCar announcing a joint venture for electric automobile sharing services. 
E) Greyhound developing and marketing a mobile app for customers to purchase intercity bus tickets. 
A) Yellow Cab companies launching mobile app campaigns for community-connect and awareness. 
B) Amazon launching a mobile delivery service via drones. 
C) Apple launching a global network of driverless cars, buses, and trucks on demand via a mobile app. 
D) Tesla and ZipCar announcing a joint venture for electric automobile sharing services. 
E) Greyhound developing and marketing a mobile app for customers to purchase intercity bus tickets.

Question 12

Rivalry among competing sellers is generally less intense when

Accepted Answer

A) there are relatively more industry key success factors. 
B) the industry's driving forces are weak and rivals have mostly commodity products. 
C) barriers to entry are moderately low and the pool of likely entry candidates is large. 
D) rivals are wary of making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share. 
E) buyers have many alternative products or services from which to choose. 
A) there are relatively more industry key success factors. 
B) the industry's driving forces are weak and rivals have mostly commodity products. 
C) barriers to entry are moderately low and the pool of likely entry candidates is large. 
D) rivals are wary of making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share. 
E) buyers have many alternative products or services from which to choose.

Question 13

Explain why low switching costs and weakly differentiated products tend to give buyers a high degree of bargaining power.

Accepted Answer

Switching costs put a cap on how much in

Question 14

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because

Accepted Answer

A) it identifies who the industry's current market share leaders are. 
B) it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence. 
C) it helps identify which rival is in which strategic group. 
D) it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. 
E) it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing. 
A) it identifies who the industry's current market share leaders are. 
B) it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence. 
C) it helps identify which rival is in which strategic group. 
D) it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. 
E) it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

Question 15

The value net framework includes an analysis of

Accepted Answer

A) the firm, substitutes, suppliers, customers, and competitors. 
B) the firm, suppliers, customers, competitors, and driving forces. 
C) substitutes, suppliers, customers, competitors, and driving forces. 
D) the firm, suppliers, customers, competitors, and complementors. 
E) substitutes, suppliers, customers, competitors, and potential entrants. 
A) the firm, substitutes, suppliers, customers, and competitors. 
B) the firm, suppliers, customers, competitors, and driving forces. 
C) substitutes, suppliers, customers, competitors, and driving forces. 
D) the firm, suppliers, customers, competitors, and complementors. 
E) substitutes, suppliers, customers, competitors, and potential entrants.

Question 16

Which of the following is not an example of a complementor?

Accepted Answer

A) microprocessors and laptops 
B) automobiles and gasoline stations 
C) theme parks and hotels 
D) gyms and fitness equipment 
E) newspapers and Internet news providers 
A) microprocessors and laptops 
B) automobiles and gasoline stations 
C) theme parks and hotels 
D) gyms and fitness equipment 
E) newspapers and Internet news providers

Question 17

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

Accepted Answer

A) the degree to which buyers have any bargaining preferences and the extent to which buyers are price sensitive. 
B) how many buyers are engaged in collaborative partnerships with sellers. 
C) whether entry barriers are high or low and the size of the pool of likely entry candidates. 
D) whether the overall quality of the items being furnished by industry members is rising or falling. 
E) whether demand-supply conditions represent a buyer's market or a seller's market. 
A) the degree to which buyers have any bargaining preferences and the extent to which buyers are price sensitive. 
B) how many buyers are engaged in collaborative partnerships with sellers. 
C) whether entry barriers are high or low and the size of the pool of likely entry candidates. 
D) whether the overall quality of the items being furnished by industry members is rising or falling. 
E) whether demand-supply conditions represent a buyer's market or a seller's market.

Question 18

Which of the following does not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Accepted Answer

A) changes in who buys the product and how they use it, and changes in the long-term industry growth rate 
B) changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency 
C) changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration 
D) changes in buyer preferences for differentiated products instead of mostly standardized or identical products 
E) changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities 
A) changes in who buys the product and how they use it, and changes in the long-term industry growth rate 
B) changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency 
C) changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration 
D) changes in buyer preferences for differentiated products instead of mostly standardized or identical products 
E) changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities

Question 19

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

Accepted Answer

A) whether the profits of suppliers are relatively high or low. 
B) the average number of suppliers that each seller/industry member purchases from. 
C) how aggressively rival industry members are trying to differentiate their products. 
D) whether demand for supplier products is high and they are in short supply. 
E) whether the prices of the items being furnished by the suppliers are rising or falling. 
A) whether the profits of suppliers are relatively high or low. 
B) the average number of suppliers that each seller/industry member purchases from. 
C) how aggressively rival industry members are trying to differentiate their products. 
D) whether demand for supplier products is high and they are in short supply. 
E) whether the prices of the items being furnished by the suppliers are rising or falling.

Question 20

Not all buyers of an industry's product have equal degrees of bargaining power with sellers because

Accepted Answer

A) sellers in an industry provide similar products and generally their cost structures are different because of competitive advantages in their operation. 
B) some sellers may be less sensitive than others to price, quality, or service differences. 
C) along the various stages of the value chain sellers are conducive to earning attractive profits. 
D) the industry is a highly cohesive structure with limited fragmentation and few industry members. 
E) sellers are large and few in number relative to the number of buyers. 
A) sellers in an industry provide similar products and generally their cost structures are different because of competitive advantages in their operation. 
B) some sellers may be less sensitive than others to price, quality, or service differences. 
C) along the various stages of the value chain sellers are conducive to earning attractive profits. 
D) the industry is a highly cohesive structure with limited fragmentation and few industry members. 
E) sellers are large and few in number relative to the number of buyers.

Factors that influence the bargaining strength and leverage of buyers include which elements?

Which of the following is not a common type of driving force?

What are the five competitive forces that comprise the five forces model of competition?

Buyers are in position to exert strong bargaining power in dealing with sellers when

For a complete assessment of the driving forces in an industry, three steps are required. Briefly explain those steps.

The key success factors in an industry

A strategically relevant political factor in the macro-environment that will influence the performance of all firms across the board is most likely to be

Which of the following is not a factor that causes buyer bargaining power to be stronger?

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

The biggest strategy-shaping impact on on-demand transportation providers such as Uber and Lyft is most likely to be

Rivalry among competing sellers is generally less intense when

Explain why low switching costs and weakly differentiated products tend to give buyers a high degree of bargaining power.

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because

The value net framework includes an analysis of

Which of the following is not an example of a complementor?

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

Which of the following does not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

Not all buyers of an industry's product have equal degrees of bargaining power with sellers because

What Is Strategy and Why Is It Important?

Charting a Companys Direction

Evaluating a Companys Resources, Capabilities, and Competitiveness

The Five Generic Competitive Strategies

Strengthening a Companys Competitive Position

Strategies for Competing in International Markets

Corporate Strategy

Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations

Corporate Culture and Leadership

Filters

Exam 3: Evaluating a Companys External Environment

Factors that influence the bargaining strength and leverage of buyers include which elements?

Which of the following is not a common type of driving force?

What are the five competitive forces that comprise the five forces model of competition?

Buyers are in position to exert strong bargaining power in dealing with sellers when

For a complete assessment of the driving forces in an industry, three steps are required. Briefly explain those steps.

The key success factors in an industry

A strategically relevant political factor in the macro-environment that will influence the performance of all firms across the board is most likely to be

Which of the following is not a factor that causes buyer bargaining power to be stronger?

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

The biggest strategy-shaping impact on on-demand transportation providers such as Uber and Lyft is most likely to be

Rivalry among competing sellers is generally less intense when

Explain why low switching costs and weakly differentiated products tend to give buyers a high degree of bargaining power.

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because

The value net framework includes an analysis of

Which of the following is not an example of a complementor?

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

Which of the following does not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

Not all buyers of an industry's product have equal degrees of bargaining power with sellers because

What Is Strategy and Why Is It Important?

Charting a Companys Direction

Evaluating a Companys Resources, Capabilities, and Competitiveness

The Five Generic Competitive Strategies

Strengthening a Companys Competitive Position

Strategies for Competing in International Markets

Corporate Strategy

Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations

Corporate Culture and Leadership

Filters