Question 1

The higher the switching costs for industry members, the more it can

Accepted Answer

A) limit supplier bargaining power. 
B) enhance supplier bargaining power. 
C) enhance the quality of parts and components being supplied, and in effect reduce defect rates. 
D) provide important cost savings for the collaborative supplier-seller relationship. 
E) limit the supply of products and/or services.

Question 2

Identify and briefly provide examples of the most common drivers of industry change.

Accepted Answer

The answer of Identify and briefly provide examples of the...

Question 3

What is the best technique for revealing the different market or competitive position that rival firms occupy in the industry?

Accepted Answer

A) strategic group mapping 
B) PESTEL analysis 
C) five forces framework 
D) the Value Net framework 
E) competitor analysis

Question 4

Identify five factors that tend to intensify competitive rivalry among an industry's member firms.

Accepted Answer

The answer of Identify five factors that tend to intensify...

Question 5

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers relatively moderate-to-weak?

Accepted Answer

A) The supply of soccer balls increases during the World Cup season. 
B) Consumers can easily compare different smartphones' features over the Internet before buying them. 
C) Apple designs and manufactures its chip processors rather than buying them from Intel. 
D) Dairy products are usually standardized and therefore differentiated only by price. 
E) Buyers tend to delay purchases of luxury goods, such as home entertainment systems, until they are on sale.

Question 6

Angela and Jeff are co-owners of five specialty cupcake baking stores in their region. Which of the following questions would not help them to predict the next strategic moves and countermoves of their rivals?

Accepted Answer

A) Which mode of transport does the rival's supplier use? 
B) How does the rival manage door-to-door deliveries at no extra cost? 
C) What percentage of customers frequent the rival's store? 
D) Why are the rival's cupcakes so popular among customers? 
E) How frequently does their rival fulfill special orders for custom cupcakes and how large are those special orders?

Question 7

Competitive intelligence can be gleaned from

Accepted Answer

A) company press releases, company websites, management presentations, annual reports, and 10-K filings. 
B) SWOT analysis, PESTLE analysis, KSF analysis, and driving forces analysis. 
C) strategic group maps, Value Net analysis, and five force analysis. 
D) financial ratio analysis, KSF analysis, driving forces analysis, and five forces analysis. 
E) KSF analysis, Value Net analysis, and driving forces analysis.

Question 8

When drawing a strategic group map

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.

Question 9

What are the six key questions that form the framework of thinking strategically about a company's industry and competitive environment?

Accepted Answer

The answer of What are the six key questions that...

Question 10

Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and generally are

Accepted Answer

A) determined by the sizes of strategic groups and the power of rival firms' competitive strategies. 
B) defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years. 
C) the cause of a reduction in the bargaining power of buyers. 
D) triggered by movement in the economy, higher or lower interest rates, or important new strategic alliances. 
E) triggered by such factors as growing competitive pressures from substitute products, and the efforts of rival firms to employ new or different offensive strategies.

Question 11

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.

Question 12

The intensity of rivalry among competing sellers does not depend on whether

Accepted Answer

A) the industry has more than two strong driving forces and whether the industry has more than two diverse and capable strategic groups. 
B) competitors are diverse in terms of long-term directions, objectives, strategies, and countries of origin. 
C) strong companies outside the industry have acquired weak firms in the industry and are launching aggressive moves to transform the acquired companies into strong market contenders. 
D) one or two rivals have particularly powerful and successful strategies to grow the business, attract and retain buyers, and develop a sustained competitive advantage. 
E) industry conditions attract industry members to use price cuts or other competitive weapons to boost total sales volume and market share.

Question 13

Identify and briefly describe five common barriers to entering an industry.

Accepted Answer

The answer of Identify and briefly describe five common barriers...

Question 14

Which of the following factors is not a relevant consideration in determining the strength of buyer bargaining power?

Accepted Answer

A) the relationship between the buyer market and seller market 
B) the degree to which the seller is a manufacturer of goods and services in substantial quantities 
C) the degree to which buyers pose a credible threat to integrate backward into the product market of sellers 
D) the degree to which buyers are well-informed about a seller's products, prices, and costs 
E) the degree to which industry goods are standardized and undifferentiated

Question 15

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.

Question 16

The five forces of competitive pressures do not include

Accepted Answer

A) the power and influence of social/demographic trends. 
B) the bargaining power of suppliers and seller-supplier collaboration. 
C) the threat of new entrants into the market. 
D) the attempts of companies in other industries to win customers over to their own substitute products. 
E) the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

Question 17

Whole Foods has invested heavily into a system for gathering competitive intelligence about the strategic direction and likely moves of key rivals in the supermarket industry. Doing so allows Whole Foods to determine which rivals are pursuing all of the following, except

Accepted Answer

A) the best strategy. 
B) flawed or weak strategies. 
C) strong performance objectives. 
D) reliable resources and capabilities. 
E) similar competitive approaches.

Question 18

Market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

Accepted Answer

A) is less strong than the competitive pressures that stem from the ready availability of attractively priced substitute products. 
B) is the strongest force among the five forces that drive profitability in an industry. 
C) emerges from close collaboration with suppliers and the competitive pressures that such collaboration creates. 
D) is less important than competitive pressure associated with the potential entry of new competitors. 
E) has about the same impact as bargaining power and leverage that large customers are able to exercise.

Question 19

Competing companies deploy whatever means necessary to strengthen market position, including all of the following except

Accepted Answer

A) marketing tactics that include special sales promotions such as introducing new or improved features or increasing the number of styles to provide greater product selection. 
B) differentiating their products by offering better performance features than rivals. 
C) improving innovation to increase product performance and quality. 
D) making efforts to expand dealer networks. 
E) reducing distribution capabilities and market presence.

Question 20

Competitive pressures associated with the threat of entry are greater in all of the following situations except when

Accepted Answer

A) incumbent firms are willing to strongly contest the entry of newcomers with moves designed to make entry unprofitable. 
B) a large pool of potential entrants exists, some of which have the capabilities to overcome high entry barriers. 
C) entry barriers are relatively low and buyer demand for the product is growing rapidly, and newcomers can expect to earn attractive profits without inviting a strong reaction from incumbents. 
D) existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence. 
E) customers have low brand preferences and low degrees of loyalty to seller.

Exam 3: Evaluating a Companys External Environment