Question 1

When is the rivalry among existing competitors in an industry likely to be more intense?

Accepted Answer

A)   When the industry growth rate is high
B)   When firms make strategic commitments to compete in an industry
C)   When firms engage in non-price competition as opposed to price-cutting
D)   When the industry has low exit barriersE) B) and C)
F) C) and D)

Question 2

Which of the following is most likely an implication of new firms entering an industry?

Accepted Answer

A)   The bargaining power of buyers will reduce.
B)   The industry's overall profit potential and sales will increase.
C)   The rivalry among existing competitors will reduce.
D)   The incumbent firms will spend more to satisfy their existing customers.E) B) and C)
F) None of the above

Question 3

Which of the following forces was NOT originally a part of Michael Porter's fives forces model?

Accepted Answer

A)   Threat of substitute products or services
B)   Bargaining power of buyers
C)   Rivalry among existing competitors
D)   Strategic role of complementsE) All of the above
F) A) and B)

Question 4

_____ is best described as cooperation by competitors to achieve a strategic objective.

Accepted Answer

A)   Co-opetition
B)   Conglomeration
C)   Amalgamation
D)   LiquidationE) None of the above
F) B) and C)

Question 5

What is the rule of thumb behind Porter's five forces model?

Accepted Answer

The five forces model enables managers t...

Question 6

Why is it important to conduct industry analysis? What does a firm's strategic position relate to?

Accepted Answer

Industry analysis provides a more rigoro...

Question 7

The primary objective of Porter's five forces model is to:

Accepted Answer

A)   replace a firm's competitive advantage with competitive parity.
B)   understand the profit potential of different industries.
C)   reduce the gap between the value of a firm's product and its cost of production.
D)   break down a firm's value chain activities into primary and support.E) A) and B)
F) C) and D)

Question 8

Which of the following strategies will be most detrimental to firms that are close rivals operating in an oligopolistic industry structure?

Accepted Answer

A)   Competing against each other through product differentiation
B)   Competing against each other through price-cutting
C)   Competing against each other through new-product introductions
D)   Competing against each other through lifestyle advertisementsE) A) and C)
F) A) and B)

Question 9

How is a firm's task environment different from its general environment? Provide examples of both types of environments.

Accepted Answer

Student answers may vary.One common appr...

Question 10

A company is best described as a _____ to an existing company if customers value the existing company's product or service offering more when they are able to combine it with the other company's product or service.

Accepted Answer

A)   competitor
B)   shareholder
C)   complementor
D)   strategic equivalentE) B) and C)
F) None of the above

Question 11

Which of the following features about a buyer indicates that the buyer has high bargaining power?

Accepted Answer

A)   When the buyer cannot credibly threaten to backwardly integrate into the industry.
B)   When the buyer cannot purchase specific products from other sellers.
C)   When the buyer faces high switching costs.
D)   When the buyer operates in an industry where products are undifferentiated.E) A) and B)
F) None of the above

Question 12

While industry forces have been favorable for a long time in the U.S.automotive industry, recent dynamics have lowered the profit potential of competing in this industry and thus reduced its attractiveness.The continued success of Tesla Motors in the industry will depend on other firm and industry factors.Which of the following represents one such factor that directly affects Tesla Motors?

Accepted Answer

A)   Since suppliers of its key sources are few, the bargaining power of suppliers is high.
B)   Since individual buyers do not have many choices, their bargaining power is low.
C)   There is a lack of balance in demand and supply: demand far exceeds capacity within the industry.
D)   There is a noticeable absence of complementary products and services for the industry.E) All of the above
F) B) and C)

Question 13

Why is supplier power in the U.S.airline industry strong?

Accepted Answer

Supplier power in the U.S.airline indust...

Question 14

True West Airlines Inc.follows a cost-leadership strategy.Which of the following firms will most likely be its direct competitor?

Accepted Answer

A)   Pioneer Airlines Inc., which follows a cost-increase strategy
B)   West Railways, which follows a differentiation strategy
C)   Jet King Airlines Inc., which follows a low-cost strategy
D)   Blue Cabs Inc., which follows a cost-leadership strategyE) B) and C)
F) A) and D)

Question 15

Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain.It demands that All Needs create more shelf space in its stores for Soapsuds' products.However, All Needs Inc.refuses to do this.Instead, it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc.has exercised its bargaining power as a buyer through _____.

Accepted Answer

A)   forward integration
B)   product differentiation
C)   crowdsourcing
D)   backward integrationE) A) and C)
F) B) and D)

Question 16

Which of the following would most likely NOT indicate that sellers are a strong competitive force in an industry?

Accepted Answer

A)   When the buyers' cost of switching to substitutes is low
B)   When the products and services they provide can be differentiated
C)   When the buyers of their products are customers who buy in small quantities
D)   When the components they supply affect buyers' product qualityE) B) and C)
F) A) and D)

Question 17

Describe the relationship between the state of an economy and its level of employment.

Accepted Answer

The state of the economy directly affect...

Question 18

Buyers are highly price sensitive when:

Accepted Answer

A)   their purchase represents a small fraction of their procurement budget.
B)   they earn low profits or are strapped for cash.
C)   the quality of their products and services are highly affected by the quality of the inputs.
D)   the industry's products are highly characterized with non-price competition.E) A) and D)
F) None of the above

Question 19

The relative bargaining power of suppliers is high when:

Accepted Answer

A)   suppliers provide products that are differentiated.
B)   incumbent firms face low supplier switching costs.
C)   incumbent firms can credibly threaten to backward integrate into the industry.
D)   suppliers depend heavily on the industry for a large portion of their revenues.E) B) and C)
F) A) and D)

Question 20

In Galvania Republic, the federal government owns and manages all the nuclear power plants.This is because the business would not be profitable if there was more than one supplier in the nuclear power industry.Which of the following industry competitive structures does the scenario best illustrate?

Accepted Answer

A)   Monopolistic competition
B)   Oligopoly
C)   Natural monopoly
D)   Perfect competitionE) B) and C)
F) A) and C)

Exam 3: External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Describe the relationship between the state of an economy and its level of employment.

Correct Answer
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The state of the economy directly affect...
View Answer

When is the rivalry among existing competitors in an industry likely to be more intense?

Correct Answer
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How is a firm's task environment different from its general environment? Provide examples of both types of environments.

Correct Answer
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Student answers may vary.One common appr...
View Answer

Which of the following strategies will be most detrimental to firms that are close rivals operating in an oligopolistic industry structure?

Correct Answer
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Correct Answer
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Buyers are highly price sensitive when:

Correct Answer
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Which of the following is most likely an implication of new firms entering an industry?

Correct Answer
verified

Which of the following features about a buyer indicates that the buyer has high bargaining power?

Correct Answer
verified

What is the rule of thumb behind Porter's five forces model?

Correct Answer
verified
The five forces model enables managers t...
View Answer

Which of the following would most likely NOT indicate that sellers are a strong competitive force in an industry?

Correct Answer
verified

True West Airlines Inc.follows a cost-leadership strategy.Which of the following firms will most likely be its direct competitor?

Correct Answer
verified

Which of the following forces was NOT originally a part of Michael Porter's fives forces model?

Correct Answer
verified

In Galvania Republic, the federal government owns and manages all the nuclear power plants.This is because the business would not be profitable if there was more than one supplier in the nuclear power industry.Which of the following industry competitive structures does the scenario best illustrate?

Correct Answer
verified

The primary objective of Porter's five forces model is to:

Correct Answer
verified

A company is best described as a _____ to an existing company if customers value the existing company's product or service offering more when they are able to combine it with the other company's product or service.

Correct Answer
verified

Correct Answer
verified

_____ is best described as cooperation by competitors to achieve a strategic objective.

Correct Answer
verified

Why is supplier power in the U.S.airline industry strong?

Correct Answer
verified
Supplier power in the U.S.airline indust...
View Answer

Why is it important to conduct industry analysis? What does a firm's strategic position relate to?

Correct Answer
verified
Industry analysis provides a more rigoro...
View Answer

The relative bargaining power of suppliers is high when:

Correct Answer
verified

Exam 3: External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Describe the relationship between the state of an economy and its level of employment.

Correct AnswerverifiedThe state of the economy directly affect...View AnswerShow Answer

When is the rivalry among existing competitors in an industry likely to be more intense?

Correct AnswerverifiedShow Answer

How is a firm's task environment different from its general environment? Provide examples of both types of environments.

Correct AnswerverifiedStudent answers may vary.One common appr...View AnswerShow Answer

Which of the following strategies will be most detrimental to firms that are close rivals operating in an oligopolistic industry structure?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Buyers are highly price sensitive when:

Correct AnswerverifiedShow Answer

Which of the following is most likely an implication of new firms entering an industry?

Correct AnswerverifiedShow Answer

Which of the following features about a buyer indicates that the buyer has high bargaining power?

Correct AnswerverifiedShow Answer

What is the rule of thumb behind Porter's five forces model?

Correct AnswerverifiedThe five forces model enables managers t...View AnswerShow Answer

Which of the following would most likely NOT indicate that sellers are a strong competitive force in an industry?

Correct AnswerverifiedShow Answer

True West Airlines Inc.follows a cost-leadership strategy.Which of the following firms will most likely be its direct competitor?

Correct AnswerverifiedShow Answer

Which of the following forces was NOT originally a part of Michael Porter's fives forces model?

Correct AnswerverifiedShow Answer

In Galvania Republic, the federal government owns and manages all the nuclear power plants.This is because the business would not be profitable if there was more than one supplier in the nuclear power industry.Which of the following industry competitive structures does the scenario best illustrate?

Correct AnswerverifiedShow Answer

The primary objective of Porter's five forces model is to:

Correct AnswerverifiedShow Answer

A company is best described as a _____ to an existing company if customers value the existing company's product or service offering more when they are able to combine it with the other company's product or service.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

_____ is best described as cooperation by competitors to achieve a strategic objective.

Correct AnswerverifiedShow Answer

Why is supplier power in the U.S.airline industry strong?

Correct AnswerverifiedSupplier power in the U.S.airline indust...View AnswerShow Answer

Why is it important to conduct industry analysis? What does a firm's strategic position relate to?

Correct AnswerverifiedIndustry analysis provides a more rigoro...View AnswerShow Answer

The relative bargaining power of suppliers is high when:

Correct AnswerverifiedShow Answer

Correct Answer
verified
The state of the economy directly affect...
View Answer

Correct Answer
verified

Correct Answer
verified
Student answers may vary.One common appr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The five forces model enables managers t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Supplier power in the U.S.airline indust...
View Answer

Correct Answer
verified
Industry analysis provides a more rigoro...
View Answer

Correct Answer
verified