Question 1

The Internet is an example of a

Accepted Answer

A)   technological force.
B)   social force.
C)   political and legal force.
D)   demographic force.
E)   global force.

Question 2

The bargaining power of an industry's buyers is greater when

Accepted Answer

A)   the industry is consolidated and the buyers are many.
B)   the buyers make small and infrequent purchases.
C)   they can threaten to enter the industry and produce the product themselves.
D)   buyers' switching costs are high.
E)   it is not feasible for buyers to purchase inputs from more than one company in the industry.

Question 3

An important determinant of the strength of the competitive forces in an industry is the changes that take place in it over time.

Accepted Answer

A) True 
 B)False

Question 4

List and briefly discuss each of the elements of Michael Porter's Five Forces Model.

Accepted Answer

1. Risk of entry of potential competitor...

Question 5

Research suggests that it is often the __________ firms in an industry that initiate price cuts or increase promotions in an attempt to cover fixed costs.

Accepted Answer

A)   strongest
B)   weakest
C)   largest
D)   oldest
E)   newest

Question 6

Within an industry, each strategic group may face a different set of opportunities and threats.

Accepted Answer

A) True 
 B)False

Question 7

Entry barriers in the embryonic stage are frequently based on

Accepted Answer

A)   brand loyalty.
B)   technological know-how
C)   absolute cost advantages.
D)   economies of scope.
E)   economies of scale

Question 8

The threat from new entrants is greatest in the _________ stage of the industry life cycle.

Accepted Answer

A)   embryonic
B)   growth
C)   shakeout
D)   maturity
E)   decline

Question 9

Which of the following is not a determinant of the extent of rivalry among established companies?

Accepted Answer

A)   The number and size distribution of companies in the industry
B)   The power of buyers
C)   The cost structure of firms in an industry
D)   Exit barriers
E)   Demand conditions

Question 10

Which of the following is not one of the factors in the economic forces of the macroenvironment?

Accepted Answer

A)   Growth rate of the economy
B)   Interest rates
C)   Price inflation
D)   Currency exchange rates
E)   Market saturation

Question 11

High exit barriers pose the greatest threat to companies in the _________ stage of the industry life cycle.

Accepted Answer

A)   embryonic
B)   growth
C)   maturity
D)   fragmented
E)   decline

Question 12

As an industry enters the shakeout stage, rivalry between companies becomes intense.

Accepted Answer

A) True 
 B)False

Question 13

Growth industries

Accepted Answer

A)   typically suffer from high mobility barriers.
B)   provide economies of scale to existing companies
C)   have high rivalry among established companies.
D)   increase prices because customers are more aware of the industry's product.
E)   tend to be characterized by weak rivalry.

Question 14

If economies of scale are an industry's primary entry barrier, a new entrant's major risk is

Accepted Answer

A)   its inability to access labor and materials.
B)   inferior quality of its products.
C)   its inability to match the innovation of the established firm.
D)   its inability to produce in sufficient volume to match the cost advantages of established producers.
E)   its inability to get buyers to switch to its product.

Question 15

All of the following are demographic forces in the macroenvironment except

Accepted Answer

A)   age
B)   values
C)   gender
D)   social class
E)   sexual orientation

Question 16

The extent of rivalry among established companies is lowest when

Accepted Answer

A)   the industry's product is a commodity.
B)   demand is growing rapidly.
C)   exit barriers are substantial.
D)   the industry is entering a decline stage.
E)   the industry is dominated by a small number of large companies.

Question 17

What is meant by the term "strategic group," and why is it important for managers to understand this in order to position their companies in a competitive marketplace?

Accepted Answer

A company's business model determines ho...

Question 18

A fragmented industry consists of a small number of large companies, none of which is in a position to determine industry prices.

Accepted Answer

A) True 
 B)False

Question 19

The systematic analysis of forces in the industry environment using the Porter framework is a powerful tool that helps managers to think strategically.

Accepted Answer

A) True 
 B)False

Question 20

Mobility barriers are factors that help the movement of companies between strategic groups.

Accepted Answer

A) True 
 B)False

Exam 3: External Analysis: the Identification of Opportunities and Threats

As an industry enters the shakeout stage, rivalry between companies becomes intense.

Correct AnswerverifiedShow Answer

Entry barriers in the embryonic stage are frequently based on

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List and briefly discuss each of the elements of Michael Porter's Five Forces Model.

Correct Answerverified1. Risk of entry of potential competitor...View AnswerShow Answer

Research suggests that it is often the __________ firms in an industry that initiate price cuts or increase promotions in an attempt to cover fixed costs.

Correct AnswerverifiedShow Answer

All of the following are demographic forces in the macroenvironment except

Correct AnswerverifiedShow Answer

The bargaining power of an industry's buyers is greater when

Correct AnswerverifiedShow Answer

Within an industry, each strategic group may face a different set of opportunities and threats.

Correct AnswerverifiedShow Answer

Which of the following is not a determinant of the extent of rivalry among established companies?

Correct AnswerverifiedShow Answer

The extent of rivalry among established companies is lowest when

Correct AnswerverifiedShow Answer

An important determinant of the strength of the competitive forces in an industry is the changes that take place in it over time.

Correct AnswerverifiedShow Answer

Growth industries

Correct AnswerverifiedShow Answer

Which of the following is not one of the factors in the economic forces of the macroenvironment?

Correct AnswerverifiedShow Answer

The Internet is an example of a

Correct AnswerverifiedShow Answer

If economies of scale are an industry's primary entry barrier, a new entrant's major risk is

Correct AnswerverifiedShow Answer

The threat from new entrants is greatest in the _________ stage of the industry life cycle.

Correct AnswerverifiedShow Answer

What is meant by the term "strategic group," and why is it important for managers to understand this in order to position their companies in a competitive marketplace?

Correct AnswerverifiedA company's business model determines ho...View AnswerShow Answer

The systematic analysis of forces in the industry environment using the Porter framework is a powerful tool that helps managers to think strategically.

Correct AnswerverifiedShow Answer

High exit barriers pose the greatest threat to companies in the _________ stage of the industry life cycle.

Correct AnswerverifiedShow Answer

Mobility barriers are factors that help the movement of companies between strategic groups.

Correct AnswerverifiedShow Answer

A fragmented industry consists of a small number of large companies, none of which is in a position to determine industry prices.

Correct AnswerverifiedShow Answer

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1. Risk of entry of potential competitor...
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A company's business model determines ho...
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