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

Satchels Corp.has been in the retail bag business for 10 years.It has created unique value and attained brand loyalty from its customers.Recently,a new bag company started up in the same area as Satchels.In order to retain the reputation that it has established and avoid competition with the new company,Satchels introduced a new line of fashion bags,conducted a sale,and also increased its advertising.This made it difficult for the new company to gain profits.This scenario best illustrates _____.

The ways of taking advantage of conditions in the environment to become more profitable most accurately defines the term _____.

The household appliance industry has few major manufacturers like Nebula Corp.,Cook Well Inc.,and Mercury Corp.and a few smaller manufacturers.There is not much competition in this industry because the smaller companies cannot afford to compete aggressively with the large firms which do not engage in price wars.This scenario best illustrates a _____.

The board of directors of August Inc.,a company that provides legal services,has been debating over whether to provide its 99 full-time employees with health insurance.The managers of the firm,however,are considering dropping employee health insurance as a benefit.Which of the following statements strengthens the managers' consideration?

The management of GNH Corp.,a chemical plant in the city of Werkshore,has promised to take care of its surroundings.It assured to dispose its factory wastes in a way that does not affect the habitat.In order to do so,the company had to go through renovations that allow the plant to take up green initiatives.Which of the following is the source of change for GNH Corp.?

Hercules Inc.is an high performing steel manufacturing company.Chang,a stakeholder of the company,believes that it is important to protect the company from threats.Hercules Inc.has often struggled to overcome rivalry and product substitutes.Chang claims that if the company constantly keeps a check on itself by creating power over buyers,paying heed to customers' requests,and strengthening its resources and manpower,the company can maintain competitive advantage.Which of the following statements strengthens Chang's claim?

BlockWood Inc.has been providing raw materials to Couches Corp.,a furniture company.The management at Couches recently decided to cut the prices it pays for the raw materials.BlockWood Inc.tried to negotiate a price that would be feasible for both companies,but Couches did not agree to pay more than what they had quoted.As BlockWood Inc.was facing similar difficulties with other buyers too,it eventually stopped supplying raw materials and took to manufacturing furniture instead.This scenario best illustrates _____.

Competition among firms within an industry best defines the term _____.

Define barriers to entry and briefly mention its characteristics.

Which of the following statements is true about concentrated industries?