Question 1

All other things being equal, which of the following would lead to lower barriers to entry in an industry?

Accepted Answer

A)  The existence of economies of scale in the industry 
B)  Products are highly differentiated in the industry. 
C)  Industry incumbents have learning-curve cost advantages. 
D)  Raw materials are widely and readily available at a competitive price.

Question 2

Incumbent firms may have a whole range of cost advantages compared to new competitors.

Accepted Answer

A) True 
 B)False

Question 3

Product innovation is an effort to refine and improve a firm's current processes.

Accepted Answer

A) True 
 B)False

Question 4

The aging of the "baby boomer" generation in American society is an example of a demographic trend.

Accepted Answer

A) True 
 B)False

Question 5

Identify and define the three elements of the S-C-P model.

Accepted Answer

The answer of Identify and define the three elements of...

Question 6

Brand identification and customer loyalty serve as entry barriers because new entrants not only have to absorb the standard costs associated with starting production in a new industry, but also have to absorb the costs associated with overcoming an incumbent firm's differentiation advantages.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following attributes makes suppliers a stronger threat?

Accepted Answer

A)  The supplier's industry is dominated by a small number of firms. 
B)  The product or service provided by suppliers is not highly differentiated. 
C)  Suppliers are threatened by substitutes. 
D)  Suppliers are not able to engage in forward vertical integration.

Question 8

________ are resources required to successfully compete in an industry.

Accepted Answer

A)  Strategically valuable assets 
B)  Technological leader strategies 
C)  Process innovations 
D)  Product innovations

Question 9

Industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies are called ________ industries.

Accepted Answer

A)  fragmented 
B)  mature 
C)  emerging 
D)  declining

Question 10

A firm's supplier poses a greater threat if the supplier's industry has a large number of firms, none of which dominate the supplying industry, than if the supplier's industry is dominated by a small number of firms.

Accepted Answer

A) True 
 B)False

Question 11

The threat of existing competition tends to be high in an industry when firms are able to meaningfully differentiate their products.

Accepted Answer

A) True 
 B)False

Question 12

Firms in a declining industry that engage in a long, systematic phased withdrawal from the industry, extracting as much value as possible during the withdrawal period, are following a(n) ________ strategy.

Accepted Answer

A)  niche 
B)  expansion 
C)  divestment 
D)  harvest

Question 13

Buyers tend to have less power when

Accepted Answer

A)  a firm has only one buyer, or a small number of buyers. 
B)  the products or services being sold to buyers are standard and not differentiated. 
C)  the supplies they purchase are an insignificant portion of the costs of their final products. 
D)  they are not earning significant economic profits.

Question 14

Firms pursuing a harvest strategy in a declining industry do not expect to remain in the industry over the long term.

Accepted Answer

A) True 
 B)False

Question 15

________ make a wide variety of raw materials, labor and other critical assets available to firms.

Accepted Answer

A)  Buyers 
B)  Rivals 
C)  Suppliers 
D)  Substitutes

Question 16

The threat of entry in an industry depends on the cost of entry, and the cost of entry, in turn, depends upon the existence and "height" of barriers to entry.

Accepted Answer

A) True 
 B)False

Question 17

Discuss the difference between a company's existing direct competitors and its substitutes and discuss the role substitutes play in an industry.

Accepted Answer

The answer of Discuss the difference between a company's existing...

Question 18

Identify the four types of competition, the attributes of each type and the expected performance under each.

Accepted Answer

The answer of Identify the four types of competition, the...

Question 19

Learning-curve cost advantages are present when the cost of production falls with the cumulative volume of production.

Accepted Answer

A) True 
 B)False

Exam 2: Evaluating a Firms External Environment

All other things being equal, which of the following would lead to lower barriers to entry in an industry?

Incumbent firms may have a whole range of cost advantages compared to new competitors.

Product innovation is an effort to refine and improve a firm's current processes.

The aging of the "baby boomer" generation in American society is an example of a demographic trend.

Identify and define the three elements of the S-C-P model.

Brand identification and customer loyalty serve as entry barriers because new entrants not only have to absorb the standard costs associated with starting production in a new industry, but also have to absorb the costs associated with overcoming an incumbent firm's differentiation advantages.

Which of the following attributes makes suppliers a stronger threat?

________ are resources required to successfully compete in an industry.

Industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies are called ________ industries.

A firm's supplier poses a greater threat if the supplier's industry has a large number of firms, none of which dominate the supplying industry, than if the supplier's industry is dominated by a small number of firms.

The threat of existing competition tends to be high in an industry when firms are able to meaningfully differentiate their products.

Firms in a declining industry that engage in a long, systematic phased withdrawal from the industry, extracting as much value as possible during the withdrawal period, are following a(n) ________ strategy.

Buyers tend to have less power when

Firms pursuing a harvest strategy in a declining industry do not expect to remain in the industry over the long term.

________ make a wide variety of raw materials, labor and other critical assets available to firms.

The threat of entry in an industry depends on the cost of entry, and the cost of entry, in turn, depends upon the existence and "height" of barriers to entry.

Discuss the difference between a company's existing direct competitors and its substitutes and discuss the role substitutes play in an industry.

Identify the four types of competition, the attributes of each type and the expected performance under each.

Learning-curve cost advantages are present when the cost of production falls with the cumulative volume of production.