Exam 2: Analysis of the External Environment: Opportunities and Threats

Royalz Inc.is an automobile company that requires a lot of raw material to manufacture its cars.Royalz Inc.buys these raw materials from other companies that sell car parts as products.From which of the following does Royalz Inc.source its inputs?

A hardware company named Ace Works Corp.has been going through financial problems because the entire industry experienced a drastic rise in prices.This has made it hard for the company to plan any future investments as it cannot risk the chance of losing more funds.Rather than development,most of the companies in this industry are experiencing an increase in price competition because all of them are competing with each other to gain more market share.Which of the following general economic conditions is Ace Works Corp.experiencing?

MouseTag Inc.has incorporated a new type of technology that has increased the potential of the company by two fold.Its machinery can now work faster and produce more products in a day than any of its previous machines ever could.This has also helped increase the profits of the company.Which of the following trends does this scenario best illustrate?

Smart Waves Inc.,a company that sells computers,provides an external hard disk along with its high-end professional laptops.Customers can store extra data in these hard disks without having to purchase them.The offer that Smart Waves provides is an example of _____.

Leo Corp.,an automobile company,experienced an increase in growth rate this year as the company sold its products at a lesser rate due to the economic conditions that the industry recently went through.This has helped the company to attain more investments than before and consequently to invest in new assets,research and development,and new product development.Which of the following macroeconomic forces does this scenario best illustrate?

A federal act was passed in the country of Arahonia which changed the way many of the Arahonian industries worked.Most of the firms in Arahonia had to restructure their strategic plans accordingly.This resulted in the larger firms acquiring the smaller ones which did not exit the market altogether.This scenario best illustrates a(n)_____.

Readmore Publishing House,the publisher of a regional daily,has been slowly losing profits as its readers prefer to get news through the television.A recent study on the readers who made the switch stated that it is more accessible and faster to attain up-to-date news through the television rather than to wait for the next day for an update on current events.Which of the following is Readmore Publishing House is facing?

A popular food company,Crunchez Corp.,is finding it difficult to retain its buyers as another food company,MidnightSnax Inc.,has started to provide the same product with the same taste for a lesser price.Which of the following is a threat to Crunchez Corp.?

Bright Inc.is a toothpaste manufacturing company that is facing intense competition from its rivals.In order to encourage higher consumption of its products as well as minimize brand switching among its existing consumers,Bright introduced sweepstakes as a consumer sales promotion strategy.However,its rivals retaliated by introducing deals such as a featured price which is lower than the regular price,buy one,get one free offers,and large package offers that give a percentage more free.This scenario best illustrates a _____.

Which of the following statements is true of a fragmented industry?

In what way are switching costs a fundamental part of not just rivalry but also the force of new entrants?

How is buying power related to switching costs?

WillowWorks LLC,a retail clothing store,has been sourcing its raw materials from a supplier named ThreadTym Corp.for the last five years.A change of management at ThreadTym resulted in an increase of the prices of the raw materials.As a result,WillowWorks purchases ThreadTym so that it can produce these products on its own.This scenario best illustrates _____.

Summer Corp.,a retailer of consumer electronics,has been experiencing high profits because an increasing percentage of the customers have sufficient disposable income to afford its products.Similar companies have also experienced a boom in customer demand.Which of the following macroeconomic forces is Summer Corp.experiencing?

SliderPage Inc.,a furniture company,has been trying hard to keep its profits going.SliderPage asked its suppliers to reduce the cost of the raw materials that would be needed to create its products and also tried to buy supplies that are less expensive.Which of the following buyer price sensitivity factors is best illustrated in this scenario?

How do switching costs affect industry rivalry?

Mention the general environmental factors that can affect the profit potential of a firm.Briefly explain the factors of technological change and social / cultural forces.

Identify the five forces that shape the profit-making potential of an average firm in an industry.Discuss the basic steps involved in using the five forces analysis tool.

Explain the reason why substitute products are taken as a threat by firms.

CoolDrink Inc.,a beverage company,had to change its medical insurance policies because of a new federal law.The new law required all companies with over 50 full-time employees to provide health insurance for their employees.In case these companies are unable to do so,they would have to face penalty.CoolDrink Inc.had to implement changes due to _____.