Exam 2: Evaluating a Firms External Environment

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

The major opportunity facing firms in fragmented industries is

The five forces framework is based on the S-C-P model and identifies the five most common threats facing firms from their local competitive environment and the conditions under which these threats are more or less likely to be present.

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

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

A fragmented industry is an industry that has experienced an absolute decline in unit sales over a sustained period of time.

Frequent price cutting by firms in an industry,frequent introduction of new products by firms in an industry and intense advertising campaigns are indications of

The level of direct competition in the fastfood industry can best be described as

In the structure-conduct-performance model,the term "performance" refers solely to the performance of individual firms.

An emerging industry is an industry in which a large number of small or medium-sized firms operate and no small set of firms has a dominant market share or creates dominant technologies.

All of the following are elements of the general environment except

All divestments are caused by industry decline.

What are customer-switching costs?

If your customers value your products more when they have your product and another firm's product rather than when they have your product alone,the other firm is considered to be a

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

Sophisticated software can enhance the value that customers receive from a personal computer.Therefore,software can be said to be a complementor of a personal computer.

BidBuy is the world's leading online auction company. When BidBuy was founded ten years ago it was the first online auction company, and it has been the leader since it was founded. Although there are other firms in the industry, BidBuy controls over 75% of the market in the United States, and three additional firms control another 20% of the U.S. market. One of the aspects of BidBuy that keeps users from changing to other online auction companies is the large user base BidBuy has built and a feedback rating system that allows buyers and sellers to rate their satisfaction with each other following each transaction. This allows users to build a reputation for honesty and trustworthiness. Sellers with a high feedback rating tend to receive more bids on their auctions and a higher price for their goods. To help facilitate payment transfers between buyers and sellers following successful online auctions, companies such as DollarDog have been founded, and these companies have facilitated growth for BidBuy. Having attained a 75% market share in the U.S., BidBuy has begun expanding internationally, opening its own sites in some countries and purchasing incumbents in others. In its international expansion, BidBuy has allowed its individual companies to customize their offerings according to the needs and desires of the countries in which they operate and when these companies are successful, BidBuy works to transfer these successful capabilities throughout the firm. -BidBuy has a ________ advantage.

A firm following a niche strategy in a declining industry reduces its scope of operations and focuses on narrow segments of the declining industry.

Identify the six interrelated elements that comprise a firm's general environment.

Within the five forces framework,when all five threats are very high,competition in the industry begins to approach a monopoly.