Question 1

One of the things that can be gleaned from a strategic group map of industry rivals is

Accepted Answer

A)  which rivals have been in business longer and thus have greater access to experience curve effects. 
B)  which rivals have newer manufacturing facilities and thus have achieved greater product quality. 
C)  which strategic groups have the highest profit margins and the highest customer switching costs and thus represent key operating characteristics. 
D)  that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces. 
E)  which strategic groups are currently being shunned by customers because of high prices and relatively low product quality. 
A)  which rivals have been in business longer and thus have greater access to experience curve effects. 
B)  which rivals have newer manufacturing facilities and thus have achieved greater product quality. 
C)  which strategic groups have the highest profit margins and the highest customer switching costs and thus represent key operating characteristics. 
D)  that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces. 
E)  which strategic groups are currently being shunned by customers because of high prices and relatively low product quality.

Question 2

Which of the following is NOT an integral part of driving-forces analysis?

Accepted Answer

A)  determining whether forces are acting to cause fundamental changes in industry conditions and/or the industry's competitiveness 
B)  determining whether forces are acting to cause industry rivals to shift to a different strategic group 
C)  determining whether forces are acting to strengthen or weaken market demand 
D)  determining whether forces are acting to make competition more or less intense 
E)  determining whether forces are acting to raise or lower industry profitability 
A)  determining whether forces are acting to cause fundamental changes in industry conditions and/or the industry's competitiveness 
B)  determining whether forces are acting to cause industry rivals to shift to a different strategic group 
C)  determining whether forces are acting to strengthen or weaken market demand 
D)  determining whether forces are acting to make competition more or less intense 
E)  determining whether forces are acting to raise or lower industry profitability

Question 3

An industry contains one strategic group when all sellers

Accepted Answer

A)  are subject to the same driving forces. 
B)  place about the same emphasis on various distribution channels. 
C)  use the same key success factors to differentiate their products. 
D)  pursue essentially identical strategies and have similar market positions. 
E)  pursue varying distribution channels and product attributes, and have customer service attributes that differentiate them in the marketplace. 
A)  are subject to the same driving forces. 
B)  place about the same emphasis on various distribution channels. 
C)  use the same key success factors to differentiate their products. 
D)  pursue essentially identical strategies and have similar market positions. 
E)  pursue varying distribution channels and product attributes, and have customer service attributes that differentiate them in the marketplace.

Question 4

Potential entrants are more likely to be deterred from actually entering an industry when

Accepted Answer

A)  incumbent firms are willing and able to be aggressive in defending their market positions against entry. 
B)  incumbent firms are complacent. 
C)  buyers are not particularly price-sensitive and the industry already contains a dozen or more rivals. 
D)  the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage. 
E)  buyer switching costs are moderately low because of strong product differentiation among incumbent firms. 
A)  incumbent firms are willing and able to be aggressive in defending their market positions against entry. 
B)  incumbent firms are complacent. 
C)  buyers are not particularly price-sensitive and the industry already contains a dozen or more rivals. 
D)  the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage. 
E)  buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

Question 5

In analyzing the strength of competition among rival firms, an important consideration is

Accepted Answer

A)  the potential for buyers to exercise strong bargaining power. 
B)  the diversity of competitors in terms of long-term direction, objectives, strategies, and countries of origin. 
C)  the number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership strategies and focus strategies. 
D)  the extent to which some rivals have more than two competitively valuable competencies or capabilities. 
E)  whether the industry is characterized by a strong learning/experience curve and whether the industry is composed of many or few strategic groups. 
A)  the potential for buyers to exercise strong bargaining power. 
B)  the diversity of competitors in terms of long-term direction, objectives, strategies, and countries of origin. 
C)  the number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership strategies and focus strategies. 
D)  the extent to which some rivals have more than two competitively valuable competencies or capabilities. 
E)  whether the industry is characterized by a strong learning/experience curve and whether the industry is composed of many or few strategic groups.

Question 6

The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market is

Accepted Answer

A)  the five forces framework. 
B)  PESTEL. 
C)  the driving forces model. 
D)  strategic group mapping. 
E)  SWOT analysis. 
A)  the five forces framework. 
B)  PESTEL. 
C)  the driving forces model. 
D)  strategic group mapping. 
E)  SWOT analysis.

Question 7

Using the five forces model of competition to determine the character and strength of the competitive forces within a given industry involves

Accepted Answer

A)  building the picture of competition in three steps: (1) identify the different parties involved, along with specific factors that bring about competitive pressures; (2) evaluate how strong the pressures stemming from each of the five forces are (strong, moderate or weak); and (3) determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry. 
B)  building the picture of competition in two steps: (1) determining which rival has the biggest competitive advantage and (2) assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits. 
C)  evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors. 
D)  assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures. 
E)  gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage. 
A)  building the picture of competition in three steps: (1) identify the different parties involved, along with specific factors that bring about competitive pressures; (2) evaluate how strong the pressures stemming from each of the five forces are (strong, moderate or weak); and (3) determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry. 
B)  building the picture of competition in two steps: (1) determining which rival has the biggest competitive advantage and (2) assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits. 
C)  evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors. 
D)  assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures. 
E)  gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage.

Question 8

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.

Question 9

In mapping, strategic groups

Accepted Answer

A)  one strategic variable and one financial variable should be used as axes for the map. 
B)  it is important for the variables used as axes to be highly correlated. 
C)  the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry. 
D)  it is important to use price as the variable for the vertical axis. 
E)  the primary objective is to determine which strategic groups are profitable and which are not. 
A)  one strategic variable and one financial variable should be used as axes for the map. 
B)  it is important for the variables used as axes to be highly correlated. 
C)  the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry. 
D)  it is important to use price as the variable for the vertical axis. 
E)  the primary objective is to determine which strategic groups are profitable and which are not.

Question 10

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

Accepted Answer

A)  the speed with which general economic conditions and interest rates are changing. 
B)  the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members. 
C)  how many buyers purchase all of their requirements from a single seller versus how many purchase from several sellers. 
D)  the number of buyers versus the number of sellers. 
E)  whether industry members are spending more or less on advertising. 
A)  the speed with which general economic conditions and interest rates are changing. 
B)  the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members. 
C)  how many buyers purchase all of their requirements from a single seller versus how many purchase from several sellers. 
D)  the number of buyers versus the number of sellers. 
E)  whether industry members are spending more or less on advertising.

Question 11

Not all positions on a strategic group map are equally attractive because

Accepted Answer

A)  small strategic groups are always less profitable than large strategic groups. 
B)  entry and exit barriers are different for each strategic group. 
C)  across-group rivalry is always weakest at the outer edge of the strategic group map. 
D)  industry driving forces and competitive pressures favor some groups and disadvantage others. 
E)  key success factors are substantially different for differently positioned industry participants. 
A)  small strategic groups are always less profitable than large strategic groups. 
B)  entry and exit barriers are different for each strategic group. 
C)  across-group rivalry is always weakest at the outer edge of the strategic group map. 
D)  industry driving forces and competitive pressures favor some groups and disadvantage others. 
E)  key success factors are substantially different for differently positioned industry participants.

Question 12

An industry's key success factors can always be deduced by asking what factors

Accepted Answer

A)  are a function of market share, entry barriers, and economies of scale, degree of vertical integration, and industry profitability that are advantageous. 
B)  vary according to whether an industry has high or low long-term attractiveness. 
C)  such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage. 
D)  can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies. 
E)  depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack. 
A)  are a function of market share, entry barriers, and economies of scale, degree of vertical integration, and industry profitability that are advantageous. 
B)  vary according to whether an industry has high or low long-term attractiveness. 
C)  such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage. 
D)  can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies. 
E)  depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

Question 13

The competitive pressures from substitute products tend to be stronger when

Accepted Answer

A)  good substitutes are readily available. 
B)  there are fewer number of substitute products. 
C)  substitutes have lower performance features. 
D)  buyers incur high costs in switching to substitutes. 
E)  substitutes are priced above the market. 
A)  good substitutes are readily available. 
B)  there are fewer number of substitute products. 
C)  substitutes have lower performance features. 
D)  buyers incur high costs in switching to substitutes. 
E)  substitutes are priced above the market.

Question 14

The most powerful of the five competitive forces is USUALLY

Accepted Answer

A)  the competitive pressures that stem from the ready availability of attractively priced substitute products. 
B)  the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry. 
C)  the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates. 
D)  the competitive pressures associated with the potential entry of new competitors. 
E)  the bargaining power and leverage that large customers are able to exercise. 
A)  the competitive pressures that stem from the ready availability of attractively priced substitute products. 
B)  the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry. 
C)  the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates. 
D)  the competitive pressures associated with the potential entry of new competitors. 
E)  the bargaining power and leverage that large customers are able to exercise.

Question 15

To succeed in predicting a competitor's next moves, company strategists need to appraise a rival's

Accepted Answer

A)  current strategy, financial health, market share, resources and capabilities. 
B)  strategic group, assumptions, resources and capabilities, financial health. 
C)  current strategy, assumptions, resources and capabilities, objectives. 
D)  market share, strategic group, driving forces, assumptions. 
E)  resources and capabilities, assumptions, current strategy, objectives. 
A)  current strategy, financial health, market share, resources and capabilities. 
B)  strategic group, assumptions, resources and capabilities, financial health. 
C)  current strategy, assumptions, resources and capabilities, objectives. 
D)  market share, strategic group, driving forces, assumptions. 
E)  resources and capabilities, assumptions, current strategy, objectives.

Question 16

As a rule, the collective impact of competitive pressures associated with the five competitive forces

Accepted Answer

A)  determines the strength of the industry's driving forces. 
B)  determines the extent of the competitive pressure on industry profitability. 
C)  means that fewer companies can achieve a competitive advantage via anything other than being the industry's low-cost leader. 
D)  means there will be a larger number of competitive advantage opportunities for industry members. 
E)  means there will be a greater number of industry key success factors. 
A)  determines the strength of the industry's driving forces. 
B)  determines the extent of the competitive pressure on industry profitability. 
C)  means that fewer companies can achieve a competitive advantage via anything other than being the industry's low-cost leader. 
D)  means there will be a larger number of competitive advantage opportunities for industry members. 
E)  means there will be a greater number of industry key success factors.

Question 17

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers

Accepted Answer

A)  is competitively unattractive from the standpoint of earning good profits. 
B)  offers little ability to build a sustainable competitive advantage. 
C)  is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand. 
D)  offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage. 
E)  requires that industry members have a strongly differentiated product offering in order to be profitable. 
A)  is competitively unattractive from the standpoint of earning good profits. 
B)  offers little ability to build a sustainable competitive advantage. 
C)  is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand. 
D)  offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage. 
E)  requires that industry members have a strongly differentiated product offering in order to be profitable.

Question 18

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 19

Which of the following is NOT one of the principal components of strategic significance in the PESTEL analysis?

Accepted Answer

A)  political factors including the extent to which government intervenes in the economy 
B)  economic conditions that include the general economic climate and specific factors such as interest rates, inflation rate, and unemployment rate, as well as conditions in the stock and bond markets that can affect consumer confidence 
C)  sociocultural forces including societal values, attitudes, cultural factors, and lifestyles that impact business 
D)  technological factors that include the pace of change and technical developments that have the potential for impacting society 
E)  environmental forces that include the competitive structure, the degree of industry fragmentation, and the mobility barriers that inhibit business 
A)  political factors including the extent to which government intervenes in the economy 
B)  economic conditions that include the general economic climate and specific factors such as interest rates, inflation rate, and unemployment rate, as well as conditions in the stock and bond markets that can affect consumer confidence 
C)  sociocultural forces including societal values, attitudes, cultural factors, and lifestyles that impact business 
D)  technological factors that include the pace of change and technical developments that have the potential for impacting society 
E)  environmental forces that include the competitive structure, the degree of industry fragmentation, and the mobility barriers that inhibit business

Question 20

Identify and briefly explain any three factors that lead to weak bargaining power on the part of buyers.

Accepted Answer

Competitive pressures from buyers decrea

One of the things that can be gleaned from a strategic group map of industry rivals is

Which of the following is NOT an integral part of driving-forces analysis?

An industry contains one strategic group when all sellers

Potential entrants are more likely to be deterred from actually entering an industry when

In analyzing the strength of competition among rival firms, an important consideration is

The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market is

Using the five forces model of competition to determine the character and strength of the competitive forces within a given industry involves

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

In mapping, strategic groups

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

Not all positions on a strategic group map are equally attractive because

An industry's key success factors can always be deduced by asking what factors

The competitive pressures from substitute products tend to be stronger when

The most powerful of the five competitive forces is USUALLY

To succeed in predicting a competitor's next moves, company strategists need to appraise a rival's

As a rule, the collective impact of competitive pressures associated with the five competitive forces

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers

The value net framework includes an analysis of

Which of the following is NOT one of the principal components of strategic significance in the PESTEL analysis?

Identify and briefly explain any three factors that lead to weak bargaining power on the part of buyers.

What Is Strategy and Why Is It Important

Leading the Process of Crafting and Executing Strategy

Evaluating a Companys Resources and Competitive Position

The Five Generic Competitive Strategies: Which One to Employ

Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices

Strategies for Competing in Foreign Markets

Diversification: Strategies for Managing a Group of Businesses

Ethical Business Strategies, Social Responsibility, and Environmental Sustainabil ITY

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

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Exam 3: Evaluating a Companys External Environment

One of the things that can be gleaned from a strategic group map of industry rivals is

Which of the following is NOT an integral part of driving-forces analysis?

An industry contains one strategic group when all sellers

Potential entrants are more likely to be deterred from actually entering an industry when

In analyzing the strength of competition among rival firms, an important consideration is

The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market is

Using the five forces model of competition to determine the character and strength of the competitive forces within a given industry involves

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

In mapping, strategic groups

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

Not all positions on a strategic group map are equally attractive because

An industry's key success factors can always be deduced by asking what factors

The competitive pressures from substitute products tend to be stronger when

The most powerful of the five competitive forces is USUALLY

To succeed in predicting a competitor's next moves, company strategists need to appraise a rival's

As a rule, the collective impact of competitive pressures associated with the five competitive forces

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers

The value net framework includes an analysis of

Which of the following is NOT one of the principal components of strategic significance in the PESTEL analysis?

Identify and briefly explain any three factors that lead to weak bargaining power on the part of buyers.

What Is Strategy and Why Is It Important

Leading the Process of Crafting and Executing Strategy

Evaluating a Companys Resources and Competitive Position

The Five Generic Competitive Strategies: Which One to Employ

Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices

Strategies for Competing in Foreign Markets

Diversification: Strategies for Managing a Group of Businesses

Ethical Business Strategies, Social Responsibility, and Environmental Sustainabil ITY

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

Filters