Question 1

A firm's _____ relates to its ability to create value for customers (V)while containing the cost to do so (C).

Accepted Answer

A)  strategic position 
B)  incumbency 
C)  threat of entry 
D)  attrition rate 
A)  strategic position 
B)  incumbency 
C)  threat of entry 
D)  attrition rate

Question 2

Which of the following factors best contributes to the U.S.automotive industry being characterized by high entry barriers?

Accepted Answer

A)  New auto companies create electric cars powered by simpler motors and gearboxes. 
B)  New entrants in the automotive industry expect that incumbents will not or cannot retaliate. 
C)  Car manufacturers require large-scale production in order to be cost-competitive. 
D)  Few industrial products are as easy to build as cars powered by internal combustion engines. 
A)  New auto companies create electric cars powered by simpler motors and gearboxes. 
B)  New entrants in the automotive industry expect that incumbents will not or cannot retaliate. 
C)  Car manufacturers require large-scale production in order to be cost-competitive. 
D)  Few industrial products are as easy to build as cars powered by internal combustion engines.

Question 3

Buyers are highly price sensitive when

Accepted Answer

A)  their purchase represents a small fraction of their procurement budget. 
B)  they earn low profits or are strapped for cash. 
C)  the quality of their products and services are highly affected by the quality of the inputs. 
D)  the industry's products are highly characterized with non-price competition. 
A)  their purchase represents a small fraction of their procurement budget. 
B)  they earn low profits or are strapped for cash. 
C)  the quality of their products and services are highly affected by the quality of the inputs. 
D)  the industry's products are highly characterized with non-price competition.

Question 4

When is the rivalry among existing competitors in an industry likely to be more intense?

Accepted Answer

A)  when the industry growth rate is high 
B)  when firms make strategic commitments to compete in an industry 
C)  when firms engage in non-price competition as opposed to price-cutting 
D)  when the industry has low exit barriers 
A)  when the industry growth rate is high 
B)  when firms make strategic commitments to compete in an industry 
C)  when firms engage in non-price competition as opposed to price-cutting 
D)  when the industry has low exit barriers

Question 5

In the aircraft manufacturing industry,at least for large commercial jets,Boeing and Airbus are the only competitors.There is not a significant threat of entry because

Accepted Answer

A)  entering the aircraft manufacturing industry requires huge capital investments. 
B)  there is expected to be a huge return on investment within this industry. 
C)  there is no credible threat of retaliation from the incumbents. 
D)  entering the aircraft manufacturing industry means violating government policies. 
A)  entering the aircraft manufacturing industry requires huge capital investments. 
B)  there is expected to be a huge return on investment within this industry. 
C)  there is no credible threat of retaliation from the incumbents. 
D)  entering the aircraft manufacturing industry means violating government policies.

Question 6

A firm's strategic position is likely to be strong when

Accepted Answer

A)  the entry barriers within the industry it operates in are low and the exit barriers are high. 
B)  its suppliers and vendors can easily forward integrate and buyers can backward integrate. 
C)  all the five forces in Porter's model are strong. 
D)  the gap between the value the firm's product generates and the cost to produce it is large. 
A)  the entry barriers within the industry it operates in are low and the exit barriers are high. 
B)  its suppliers and vendors can easily forward integrate and buyers can backward integrate. 
C)  all the five forces in Porter's model are strong. 
D)  the gap between the value the firm's product generates and the cost to produce it is large.

Question 7

Beans Inc.operates in a perfectly competitive agricultural industry.Classica Apparel Inc.,in contrast,operates in a monopolistically competitive industry.Keeping this information in mind,which of the following statements is true?

Accepted Answer

A)  Beans Inc. will face competition from many sellers, whereas Classica Apparel Inc. will be the only seller in the market. 
B)  While Classica Apparel Inc. will have the power to set the prices for its products, Beans Inc. will have little or no ability to do so. 
C)  Beans Inc. will have many buyers for its products, whereas Classica Apparel Inc. will have very few buyers for its products. 
D)  While Beans Inc. will communicate the degree of product differentiation through advertising, Classica Apparel Inc. will need no advertising. 
A)  Beans Inc. will face competition from many sellers, whereas Classica Apparel Inc. will be the only seller in the market. 
B)  While Classica Apparel Inc. will have the power to set the prices for its products, Beans Inc. will have little or no ability to do so. 
C)  Beans Inc. will have many buyers for its products, whereas Classica Apparel Inc. will have very few buyers for its products. 
D)  While Beans Inc. will communicate the degree of product differentiation through advertising, Classica Apparel Inc. will need no advertising.

Question 8

Which of the following is an accurate statement about near monopolies?

Accepted Answer

A)  Near monopolies are medium-sized firms that have some market power and thereby can influence the industry structure to a certain extent. 
B)  Near monopolies are small firms in an industry that have differentiated products but little or no ability to raise their prices. 
C)  Near monopolies are firms that have accrued significant market power and thereby are changing the industry structure in their favor. 
D)  Near monopolies are a few large firms that dominate an industry and have differentiated products, high barriers to entry, and some degree of pricing power. 
A)  Near monopolies are medium-sized firms that have some market power and thereby can influence the industry structure to a certain extent. 
B)  Near monopolies are small firms in an industry that have differentiated products but little or no ability to raise their prices. 
C)  Near monopolies are firms that have accrued significant market power and thereby are changing the industry structure in their favor. 
D)  Near monopolies are a few large firms that dominate an industry and have differentiated products, high barriers to entry, and some degree of pricing power.

Question 9

Fadia Ammunition Inc.,a firm controlled and managed by the government of Fadia,is the only company that has the license to produce defense arms in the country.Which of the following industry competitive structures does this best illustrate?

Accepted Answer

A)  monopolistic competition 
B)  monopoly 
C)  oligopoly 
D)  perfect competition 
A)  monopolistic competition 
B)  monopoly 
C)  oligopoly 
D)  perfect competition

Question 10

What is most likely to happen when there is too much money in an economy?

Accepted Answer

A)  There are too many goods and services. 
B)  There is a drop in interest rates. 
C)  There is high economic growth. 
D)  There is an increase in prices. 
A)  There are too many goods and services. 
B)  There is a drop in interest rates. 
C)  There is high economic growth. 
D)  There is an increase in prices.

Question 11

Which of the following is an implication of high exit barriers in an industry?

Accepted Answer

A)  The number of underperforming firms in the industry will be low. 
B)  The industry will face excess capacity. 
C)  The competitive pressure among existing firms will be low. 
D)  The industry will be more attractive for new entrants. 
A)  The number of underperforming firms in the industry will be low. 
B)  The industry will face excess capacity. 
C)  The competitive pressure among existing firms will be low. 
D)  The industry will be more attractive for new entrants.

Question 12

The telecom industry in the country of New Taria is an industry characterized by the presence of strong network effects,high brand loyalty,high economies of scale,and proprietary technology among incumbent firms.Thus,in the telecom industry,the

Accepted Answer

A)  threat of substitutes is most likely high. 
B)  threat of new entrants is most likely low. 
C)  bargaining power of buyers is most likely low. 
D)  entry barriers are most likely nonexistent. 
A)  threat of substitutes is most likely high. 
B)  threat of new entrants is most likely low. 
C)  bargaining power of buyers is most likely low. 
D)  entry barriers are most likely nonexistent.

Question 13

Pure Carat Inc.is a company that sells 24-carat gold biscuits to companies that manufacture jewelry.Since the company operates in an industry where many other suppliers sell standardized products,it can most likely

Accepted Answer

A)  easily achieve a temporary competitive advantage. 
B)  easily achieve a sustainable competitive advantage. 
C)  only achieve competitive parity. 
D)  maintain its absolute advantage for long time. 
A)  easily achieve a temporary competitive advantage. 
B)  easily achieve a sustainable competitive advantage. 
C)  only achieve competitive parity. 
D)  maintain its absolute advantage for long time.

Question 14

Economies of scale are cost advantages that accrue for firms with

Accepted Answer

A)  high fixed costs. 
B)  low employee turnover. 
C)  larger output. 
D)  high capital risks. 
A)  high fixed costs. 
B)  low employee turnover. 
C)  larger output. 
D)  high capital risks.

Question 15

Companies in the same strategic group are _____ to each other.

Accepted Answer

A)  complementors 
B)  direct competitors 
C)  strategic partners 
D)  shareholders 
A)  complementors 
B)  direct competitors 
C)  strategic partners 
D)  shareholders

Question 16

Which type of industry structure is often analyzed using game theory?

Accepted Answer

A)  oligopolistic 
B)  monopolistic 
C)  perfectly competitive 
D)  monopolistically competitive 
A)  oligopolistic 
B)  monopolistic 
C)  perfectly competitive 
D)  monopolistically competitive

Question 17

How can a firm change its industry structure from monopolistically competitive or oligopolistic to a near monopoly?

Accepted Answer

A)  by reducing the entry barriers in its industry 
B)  by developing proprietary technology 
C)  by implementing frequent price-cuts 
D)  by decreasing its pricing power 
A)  by reducing the entry barriers in its industry 
B)  by developing proprietary technology 
C)  by implementing frequent price-cuts 
D)  by decreasing its pricing power

Question 18

How are cumulative learning and experience effects of a company most likely to affect Michael Porter's five forces?

Accepted Answer

A)  Threat of new entrants will be low. 
B)  Bargaining power of suppliers will be high. 
C)  Availability of complements will be low. 
D)  Threat of substitute products and services will be high. 
A)  Threat of new entrants will be low. 
B)  Bargaining power of suppliers will be high. 
C)  Availability of complements will be low. 
D)  Threat of substitute products and services will be high.

Question 19

Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry,while at the same time Samsung and Google are increasingly becoming competitive with one another.This scenario best illustrates the process of

Accepted Answer

A)  co-opetition. 
B)  perfect competition. 
C)  monopolization. 
D)  conglomeration. 
A)  co-opetition. 
B)  perfect competition. 
C)  monopolization. 
D)  conglomeration.

Question 20

Which of the following forces was not originally a part of Michael Porter's fives forces model?

Accepted Answer

A)  threat of substitute products or services 
B)  bargaining power of buyers 
C)  rivalry among existing competitors 
D)  strategic role of complements 
A)  threat of substitute products or services 
B)  bargaining power of buyers 
C)  rivalry among existing competitors 
D)  strategic role of complements

A firm's _____ relates to its ability to create value for customers (V)while containing the cost to do so (C).

Which of the following factors best contributes to the U.S.automotive industry being characterized by high entry barriers?

Buyers are highly price sensitive when

When is the rivalry among existing competitors in an industry likely to be more intense?

In the aircraft manufacturing industry,at least for large commercial jets,Boeing and Airbus are the only competitors.There is not a significant threat of entry because

A firm's strategic position is likely to be strong when

Beans Inc.operates in a perfectly competitive agricultural industry.Classica Apparel Inc.,in contrast,operates in a monopolistically competitive industry.Keeping this information in mind,which of the following statements is true?

Which of the following is an accurate statement about near monopolies?

Fadia Ammunition Inc.,a firm controlled and managed by the government of Fadia,is the only company that has the license to produce defense arms in the country.Which of the following industry competitive structures does this best illustrate?

What is most likely to happen when there is too much money in an economy?

Which of the following is an implication of high exit barriers in an industry?

The telecom industry in the country of New Taria is an industry characterized by the presence of strong network effects,high brand loyalty,high economies of scale,and proprietary technology among incumbent firms.Thus,in the telecom industry,the

Pure Carat Inc.is a company that sells 24-carat gold biscuits to companies that manufacture jewelry.Since the company operates in an industry where many other suppliers sell standardized products,it can most likely

Economies of scale are cost advantages that accrue for firms with

Companies in the same strategic group are _____ to each other.

Which type of industry structure is often analyzed using game theory?

How can a firm change its industry structure from monopolistically competitive or oligopolistic to a near monopoly?

How are cumulative learning and experience effects of a company most likely to affect Michael Porter's five forces?

Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry,while at the same time Samsung and Google are increasingly becoming competitive with one another.This scenario best illustrates the process of

Which of the following forces was not originally a part of Michael Porter's fives forces model?

What Is Strategy

Strategic Leadership: Managing the Strategy Process

Internal Analysis: Resources, Capabilities, and Core Competencies

Competitive Advantage, Firm Performance, and Business Models

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation and Entrepreneurship

Corporate Strategy: Vertical Integration and Diversification

Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters

Exam 3: External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

A firm's _____ relates to its ability to create value for customers (V)while containing the cost to do so (C).

Which of the following factors best contributes to the U.S.automotive industry being characterized by high entry barriers?

Buyers are highly price sensitive when

When is the rivalry among existing competitors in an industry likely to be more intense?

In the aircraft manufacturing industry,at least for large commercial jets,Boeing and Airbus are the only competitors.There is not a significant threat of entry because

A firm's strategic position is likely to be strong when

Beans Inc.operates in a perfectly competitive agricultural industry.Classica Apparel Inc.,in contrast,operates in a monopolistically competitive industry.Keeping this information in mind,which of the following statements is true?

Which of the following is an accurate statement about near monopolies?

Fadia Ammunition Inc.,a firm controlled and managed by the government of Fadia,is the only company that has the license to produce defense arms in the country.Which of the following industry competitive structures does this best illustrate?

What is most likely to happen when there is too much money in an economy?

Which of the following is an implication of high exit barriers in an industry?

The telecom industry in the country of New Taria is an industry characterized by the presence of strong network effects,high brand loyalty,high economies of scale,and proprietary technology among incumbent firms.Thus,in the telecom industry,the

Pure Carat Inc.is a company that sells 24-carat gold biscuits to companies that manufacture jewelry.Since the company operates in an industry where many other suppliers sell standardized products,it can most likely

Economies of scale are cost advantages that accrue for firms with

Companies in the same strategic group are _____ to each other.

Which type of industry structure is often analyzed using game theory?

How can a firm change its industry structure from monopolistically competitive or oligopolistic to a near monopoly?

How are cumulative learning and experience effects of a company most likely to affect Michael Porter's five forces?

Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry,while at the same time Samsung and Google are increasingly becoming competitive with one another.This scenario best illustrates the process of

Which of the following forces was not originally a part of Michael Porter's fives forces model?

What Is Strategy

Strategic Leadership: Managing the Strategy Process

Internal Analysis: Resources, Capabilities, and Core Competencies

Competitive Advantage, Firm Performance, and Business Models

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation and Entrepreneurship

Corporate Strategy: Vertical Integration and Diversification

Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters