Deck 10: Strategy: the Quest to Keep Profit From Eroding

Question 1

Attractive industries have all the following,except

A)High supplier power
B)Low buyer power
C)High entry barriers
D)Low rivalry

Answer 1

A

Question 2

Firms maintain their completive edge by

A)Providing a good at lower costs than their rivals
B)Providing a superior product at the same cost as your rival
C)Being innovative
D)All the above

Answer 2

D

Question 3

Typical structure characteristics of interest to Industrial Organization researchers include

A)Barriers to entry
B)Product differentiation among firms
C)The number and size distribution of firms
D)All of the above

Answer 3

D

Question 4

Which of the following is true?

A)Industry structure determines firm conduct which in turn determines firms' performance
B)Industry structure determines firm performance which in turn determines firms' conduct
C)Industry conduct determines firm structure which in turn determines firms' performance
D)Industry performance determines firm conduct which in turn determines firms' structure

Question 5

The five forces model is a framework

A)For increasing buyer force in the market
B)For improving competition in the industry
C)For analyzing the attractiveness of an industry
D)Of matching resources and capabilities of the firm

Question 6

Low cost strategies are usually found in industries where

A)Products are not particularly differentiated
B)Price competition tends to be fierce
C)Both a and b
D)None of the above

Question 7

What are the different methods to measure industry concentration?

A)Four-firm concentration ratio.
B)HHI index.
C)Total output
D)a and b only

Question 8

The industrial organization economics perspective locates the source of advantage at the

A)Individual firm level
B)Industry level
C)Both a and b
D)None of the above

Question 9

An industry with a high four-firm concentration ratio implies

A)firms have high supplier power
B)firms have low supplier power
C)buyers have a high supplier power
D)buyers have a low supplier power

Question 10

Cost-reduction generate

A)Increases in long-run profitability
B)Increases in long-run profitability only if the cost reduction is difficult to imitate
C)Increases in product differentiation
D)Reduction in competitive intensity

Question 11

To stay one step ahead of the forces of competition,a firm can adopt one of these strategies except

A)Cost reduction
B)Product differentiation
C)Advertising
D)Reduction in the intensity of competition

Question 12

The resource-based view indicates that firms exhibit different performances within the same industry because

A)there is less buyer power
B)there are economies of scale present
C)some firms have superior resources
D)there is less competition

Question 13

The resource based view locates the source of advantage at the

A)Individual firm level
B)Industry level
C)Both a and b
D)None of the above

Question 14

For a firm to reduce competitive intensity,it should

A)Enact barrier to entry
B)Lobby to the government
C)Acquire patents
D)All the above

Question 15

What is the 4-firm concentration ratio of an industry with 25 firms each having an equal market share?

A))16.
B))24.
C))20.
D))12.

Question 16

Which of these firms have a low supplier power?

A)Pharmaceutical firms
B)Semiconductor firms
C)Car Dealerships
D)Software firms

Question 17

Supplier power tends to be low when

A)Suppliers are less concentrated
B)Inputs provided by the supplier are not vital
C)Inputs are less differentiated
D)All the above

Question 18

Apple continues to be innovative to ensure that their demand curve stays or becomes

A)More inelastic
B)More elastic
C)Unitary elastic
D)None of the above

Question 19

All these increase differentiation,except

A)Product branding
B)Reducing quality
C)Advertising
D)Limiting availability

Question 20

The industrial organization economics perspective assumes that the industry _____________ is the most important determinant of long-run profitability.

A)Structure
B)Conduct
C)Performance
D)None of the above

Question 21

Industries with high barriers to entry

A)Pushes profits to normal returns
B)increases the likelihood of firms entering the industry
C)help firms sustain profits
D)increases the number of competitors

Question 22

The concept that explains firms possessing different bundles of resources is

A)Resource heterogeneity
B)Resource immobility
C)Barriers to entry
D)imitability

Question 23

One of the limitation of Five Forces is that

A)These tools reduce producer surplus
B)For one firm to increase profit,it takes it from other participants in the industry
C)Does not provide a firm with sustainable competitive advantage
D)Both b and c

Question 24

_____________ is defined as firm's ability to earn above-average profit

A)Resource heterogeneity
B)Superior performance
C)Competitive advantage
D)Sustainable advantage

Question 25

An assumption that underline Resource-based View include

A)Resource heterogeneity
B)Resource immobility
C)Barriers to entry
D)Both a and b

Question 26

All of the following are example of entry barriers,except

A)Government protection through patents or licensing requirements
B)Strong brands
C)Low capital requirements for entry
D)Lower costs driven by economies of scale