Question 1

A strategic group consists of those firms in an industry that

Accepted Answer

A) are subject to the same driving forces. 
B) place about the same emphasis on each distribution channel. 
C) use the same key success factors to differentiate their products. 
D) employ similar competitive approaches and occupy similar positions in the market. 
E) have similar size market shares.

Question 2

The nature and strength of the competitive forces that prevail in an industry is generally a joint product of all of the following except

Accepted Answer

A) pressures associated with rivalry among sellers to attract buyer patronage. 
B) threats that firms outside the industry will decide to enter the market. 
C) attempts of companies in other industries to win buyers over to their own substitute products. 
D) pressures stemming from the bargaining power of both suppliers and buyers. 
E) those associated with environmental forces such as climate change or water shortages.

Question 3

The key success factors in an industry

Accepted Answer

A) are the strategy elements,intangible assets,and competitive capabilities that most affect industry members' abilities to prosper in the marketplace. 
B) are determined by the industry's driving forces. 
C) hinge on how many different strategic groups the industry has. 
D) depend on how many rivals are trying to move from one strategic group to another. 
E) are a function of such considerations as how many firms are in the industry,how many have market shares above five percent,and whether the business models being used are similar or diverse.

Question 4

Which of the following factors is not a relevant consideration in judging whether buyers' bargaining power is relatively strong or relatively weak?

Accepted Answer

A) The number of buyers is small,or a customer is particularly important to the seller. 
B) Buyers are relatively well informed about sellers' products,prices,and costs. 
C) Buyer needs and expectations are changing slowly or rapidly. 
D) Buyer demand is weak or strong and slowly or rapidly growing. 
E) Buyers pose a credible threat of integrating backward into the business of sellers.

Question 5

Which of the following is not one of the principal components of strategic significance in the PESTEL analysis?

Accepted Answer

A) Technological factors that include the pace of change and technical developments possessing the potential to impact society 
B) Changes in laws and regulations that give rise to the birth of new industries,new knowledge,and disruptive technologies 
C) Economic conditions that include the general economic climate and specific factors such as interest rates,inflation rate,and unemployment rate,as well as conditions in the stock and bond markets that can affect consumer confidence 
D) Sociocultural forces including societal values,attitudes,cultural factors,and lifestyles that impact business 
E) Environmental forces that include the competitive structure,the degree of industry fragmentation,and the mobility barriers that inhibit business

Question 6

Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Accepted Answer

A) Changes in who buys the product and how they use it,changes in the long-term industry growth rate,and changes in cost and efficiency 
B) Entry or exit of major firms,product innovation,and marketing innovation 
C) Increases in the economic power and bargaining leverage of customers and suppliers,growing supplier-seller collaboration,and growing buyer-seller collaboration 
D) Diffusion of technical know-how and changing societal concerns,attitudes,and lifestyles 
E) Changes in manufacturing processes brought on by technological change,increasing globalization of the industry,and new Internet capabilities

Question 7

Angela and Jeff are co-owners of five specialty cupcake and dessert bakeries 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) How frequently does their rival fulfill special orders for custom cupcakes and how large are those special orders? 
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) Which mode of transport does the rival's supplier use?

Question 8

Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors?

Accepted Answer

A) The industry's growth potential 
B) Whether competitive pressures will likely grow stronger or weaker 
C) Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces 
D) The company's competitive position in the industry and its ability to perform industry key success factors 
E) Whether the industry's product is strongly or weakly differentiated

Question 9

Can an industry be attractive to one company and unattractive to another company? Why or why not?

Accepted Answer

The answer of Can an industry be attractive to one...

Question 10

The driving forces in an industry

Accepted Answer

A) are usually triggered by changing technology or stronger learning/experience curve effects. 
B) are usually spawned by growing demand for the product,an outbreak of price cutting,and big reductions in entry barriers. 
C) are major underlying causes of change in industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions. 
D) appear when an industry begins to mature but are seldom present during early stages of the industry life cycle. 
E) are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

Question 11

A strategic group

Accepted Answer

A) consists of those industry members that are growing at about the same rate and have similar product line breadth. 
B) includes all rival firms having comparable profitability. 
C) is a cluster of industry rivals that have similar competitive approaches and market positions. 
D) consists of those firms whose market shares are about the same size. 
E) is made up of those firms having comparable profit margins.

Question 12

Whether buyers' bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

Accepted Answer

A) whether most buyers possess roughly equal or varying degrees of bargaining power. 
B) how many buyers are engaged in collaborative partnerships with sellers. 
C) whether entry barriers are high or low. 
D) whether the overall quality of the items being furnished by industry members is rising or falling. 
E) whether buyer demand is strong or declining.

Question 13

A competitive environment in which there is weak to moderate rivalry among sellers,high entry barriers,weak competition from substitute products,and little bargaining leverage on the part of both suppliers and customers

Accepted Answer

A) lacks powerful driving forces. 
B) gives each industry competitor the best potential for building sustainable competitive advantage. 
C) makes it hard for industry members to pursue a differentiation strategy. 
D) is conducive to industry members earning attractive profits. 
E) requires that industry members have low costs.

Question 14

The most powerful of the five typical sources of competitive pressures is usually

Accepted Answer

A) the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry. 
B) the competitive pressures that stem from the ready availability of attractively priced substitute products. 
C) the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates. 
D) the bargaining power and leverage that large customers are able to exercise. 
E) associated with the potential entry of new competitors.

Question 15

In which of the following instances are industry members not subject to stronger competitive pressures from substitute products?

Accepted Answer

A) The costs to buyers of switching over to the substitutes are low. 
B) Buyers are dubious about using substitutes. 
C) The quality and performance of the substitutes is well matched to what buyers need to meet their requirements. 
D) Buyer brand loyalty is weak. 
E) Substitutes are readily available at competitive prices.

Question 16

Which of the following factors should a company consider when determining if an industry offers good prospects for attractive profits?

Accepted Answer

A) The industry's growth potential,whether competition appears destined to become stronger or weaker,how the industry's driving forces might affect overall industry profitability,the company's competitive position relative to rivals,and the company's proficiency in performing industry key success factors 
B) An assessment of which firms in the industry have the best and worst competitive strategies,whether the number of strategic groups in the industry is increasing or decreasing,and whether economies of scale and experience curve effects are a key success factor 
C) Whether there are more than five key success factors and more than five barriers to entry 
D) Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group 
E) Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product

Question 17

Which one of the following does not intensify the competitive pressures associated with the threat of entry?

Accepted Answer

A) Incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers. 
B) Industry members are struggling to earn good profits. 
C) Entry barriers are relatively low. 
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) Newcomers can expect to earn attractive profits,and a number of outsiders have the expertise and resources to hurdle past whatever entry barriers exist.

Question 18

In identifying an industry's key success factors,strategists should

Accepted Answer

A) try to single out all factors that play a major role in shaping whether buyer demand grows rapidly or slowly. 
B) consider on what basis customers choose between competing brands,what resources and competitive capabilities firms need to be competitively successful,and what shortcomings are almost certain to put a company at a significant competitive disadvantage. 
C) consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak. 
D) consider what it will take to overtake the company with the industry's overall best strategy. 
E) focus their attention on what it will take to capitalize on impacts of the industry's driving forces.

Question 19

The payoff of good scouting reports on rivals is improved ability to

Accepted Answer

A) predict what strategic moves rivals are likely to make next,thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals' missteps. 
B) determine which rivals are in the best strategic group. 
C) figure out how many key success factors a rival has. 
D) determine whether a rival is gaining or losing market share,whether rivals are increasing or decreasing R&D spending,and what new marketing promotions are in the works. 
E) determine whether a rival has the best strategy and is the industry leader.

Question 20

Not all positions on a strategic group map are equally attractive because

Accepted Answer

A) entry and exit barriers are different for each strategic group. 
B) key success factors are usually quite different for differently positioned industry participants. 
C) small strategic groups are always less profitable than large strategic groups. 
D) across-group rivalry is strongest at the outer edges of the strategic group map. 
E) industry driving forces and competitive pressures favor some companies or groups and hurt others,and the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position.

Exam 3: Evaluating a Companys External Environment