Deck 3: Service Area Competitor Analysis

Question 1

Which of the following is NOT an obstacle to competitor analysis:

A)Faulty assumptions about the competition.
B)Overemphasis on competitors' visible competence.
C)Effectively evaluating industry and service boundaries.
D)Overemphasis on where, rather than how, to compete.

Answer 1

C

Question 2

The grouping of organizations according to strategic similarities and differences among competitors can aid in understanding the nature of competition and facilitate strategic decision making.

Answer 2

True

Question 3

What is the strategic significance of service area competitor analysis?

Answer 3

Within the health care community there is an understanding that health care organizations must be positioned effectively vis-à-vis their competitors. Competitor information is essential for selecting viable strategies that position the organization strongly within the market. Many health care managers agree that an organized competitor intelligence system is necessary for survival. The system acts like a radar grid - constantly monitoring consumer and competitor activity, filtering the raw information picked up by external and internal sources, processing it for strategic significance, and efficiently communicating actionable intelligence to those who need it.

Question 4

Which of the following defines the strategic dimension of specialization?

A)The level of emphasis on the quality of its offering to the marketplace.
B)The degree to which it provides ancillary services in addition to its main services.
C)The extent of value added as reflected in the level of forward and backward integration.
D)The degree to which the organization focuses its efforts in terms of the number of product categories, the target market, and the size of its service area.

Question 5

Strategic response does NOT include the likely strategic objectives and next strategic moves of competitors.

Question 6

Which of the following questions would NOT be appropriate for validating strategic assumptions?

A)Is the strategy controlling the actions of customers?
B)Is the strategy vulnerable to a successful strategic counterattack by competitors?
C)Is the strategy consonant with the competitive environment?
D)Is the strategy vulnerable to a successful strategic counterattack by competitors?

Question 7

The forces driving service area completion (the five forces model of service area structural analysis) are:

A)Threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and rivalry among existing firms.
B)Market share, bargaining power of employee groups, threat of regulation, quality of products or services, and similarities among existing firms.
C)Threats of internal weaknesses, weakness of suppliers, customer satisfaction, quantity of products or services, and diversity of existing firms.
D)Internal strengths, quality of the management team, bargaining power of customers, earnings per share, and cooperation among existing firms.

Question 8

Describe the steps in a rational process for service area competitor analysis.

Question 9

Which of the following is an example of the threat of substitute products and services?

A)Self-administered dental examinations for dentist examinations.
B)Outpatient surgery for inpatient surgery.
C)Adults being treated in pediatric specialty hospitals.
D)Massage therapy substituted for acupuncture.

Question 10

Which of the following is NOT an indicator of the bargaining power of customer or buyer groups?

A)Concentrates purchases in an industry.
B)Poses a threat of backward integration.
C)Earns high profits.
D)Has low switching costs.

Question 11

What was the rationale for Porter suggesting that the level of competitive intensity within an industry is the most critical factor in an organization's
environment?

Question 12

If an industry has a large number of suppliers, these suppliers tend to be powerful.

Question 13

In addition to defining its service area, a health care organization must analyze in detail relevant and important aspects of the service area including:

A)Competitor service categories, prices, and strategic initiatives.
B)Economic, demographic, psychographic (lifestyle), and disease pattern characteristics.
C)Politically active groups, faith preferences of the service area, and emerging health issues.
D)Product types, service delivery techniques, transportation networks, and critical infrastructure.

Question 14

Why is service area competitor analysis an important aspect of environmental analysis?

Question 15

Which of the following is a TRUE statement on service areas:

A)Service areas will be the same for different organizations.
B)Hospitals in rural areas have ill-defined service areas for their particular services.
C)The service areas for public health departments are homogenous within a state, without regard to whether they are metropolitan or rural.
D)Determining the geographic boundaries of the service area may be highly subjective and is usually based on patient histories, the reputation of the organization, and available technology.

Question 16

General and health care trends and issues, service area competitor analysis must be synthesized into which of the following:

A)Strategic issues facing the organization.
B)Price sensitivity analysis.
C)Categories of competitive analysis.
D)Periodic, comprehensive, and reliable mission statements.

Question 17

An organized competitor intelligence system:

A)Monitors consumer and competitor activity.
B)Filters the raw information picked up by external and internal sources.
C)Efficiently communicates actionable intelligence to those who need it.
D)All of the above.

Question 18

Perhaps the greatest change in the nature of the health care industry in the past decade has been the growing power of the buyers.

Question 19

Service area competitor analysis is the process of assessing service category/service area issues, identifying competitors, determining the strengths and weaknesses of rivals, and anticipating their moves.

Question 20

The more diverse the industry, the more likely there will be substitute products and services.

Question 21

Demographic indicators are often better predictors of consumer behavior than psychographic indicators.

Question 22

Competitive advantage is the means by which the organization seeks to develop cost advantage or to differentiate itself from other organizations.

Question 23

Service area competitor analysis begins with assessing service area competitive dynamics.

Question 24

For a health care organization that offers several service categories, it is necessary to conduct service area analyses only in the most important service category.

Question 25

One problem in performing competitor analysis is the tendency to be concerned only with the visible activities of competitors.

Question 26

The evaluation of competitors' strengths and weaknesses provides clues as to their future strategies and to areas where competitive advantage might be achieved.

Question 27

Members of a strategic group primarily compete with each other and do not compete with organizations outside their strategic group - even though there are other competitors outside the group that may offer similar products or services.

Question 28

The service area profile includes key competitively relevant economic, demographic, psychographic (lifestyle), and community health status indicators. Relevant economic indicators may include income distribution, major industries and employers, types of businesses and institutions, economic growth rate, seasonality of businesses, unemployment statistics,
and so on.

Question 29

Among managers in the health care industry, there is no general agreement that an organized competitor intelligence system is necessary for survival.

Question 30

Misjudging how the industry, industry segments, or service area is defined will lead to poor competitor analysis.

Question 31

Critical success factor analysis involves the identification of all activities for a service category within a service area for which the organization must achieve a high level of performance if it is to be successful.

Question 32

Achieving economies of scale is the only means by which to build a cost advantage barrier to new entrants.

Question 33

The service area is considered to be the geographic area surrounding the health care provider, from which it pulls the majority of its customers/patients.

Question 34

The service area is NOT defined by customers' preferences and the health care providers that are available.

Question 35

Cost position is the extent to which it seeks the low-cost position through efficiency programs and cost-minimizing facilities and equipment.

Question 36

It is well established that all health care executives perform effective competitor analysis.

Question 37

Service area structural analysis provides considerable insight into the attractiveness of an industry and provides a framework for understanding the competitive dynamics (the future viability of an industry).

Question 38

Customer perceptions of the organization's service category are NOT an important determination for a beneficial service area competitor analysis.

Question 39

Efficiency and low cost are NOT possible bases for achieving competitive advantage.