BUS 3: QUIZ #3------CHAPTER 3 pg. 72-99
During an interview for a CEO position, Jennifer's potential employers ask her, "If you get this job, will you focus more on industry effects or firm effects?" What should her answer be?
"Firm effects. I will be able to have the most impact on those."
What is the purpose of a Five Forces analysis?
To assess the degree of power a company has within an industry to create a competitive advantage and be profitable
What is the purpose of a PESTEL analysis?
To identify issues and future trends in the wider world which have, or can have, an impact on a company's success
What are firm effects on a company's performance?
The impact of a manager's actions to the success of the company.
What are industry effects on a company's performance?
The impact of external circumstances on the success of a company.
What is an example of customer switching cost?
A customer losing his playlists when changing to another music provider.
An oligopolistic industry is
One with a few large firms with differentiated products, high barriers to entry and some degree of pricing power.
Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit?
Substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry.
What is the network effect?
The value of a product or service increases with the number of users.
Tesla is addressing environmental concerns regarding the carbon emissions of gasoline-powered cars by building zero-emission battery-powered vehicles. This best represents which of the following PESTEL categories?
ecological
WeBreak4Bikes Inc. has a new U.S.-based client in the bicycle industry. The client's company produces only bicycles for riding on the road. The bicycles are used for reliable general purpose transportation. When asked to identify a potential substitute for the bicycle industry from the Five Forces perspective, you would select
motorcycles.
In recent years a growing number of U.S. consumers have become more health-conscious about what they eat. According to the PESTEL Framework this trend could best be classified as a ________ trend.
sociocultural
A firm's ________ relates to its ability to create value for customers while containing the cost to do so.
strategic position
Bill is researching sociocultural factors related to his employer, a sporting goods manufacturer. Which of the following would be part of the sociocultural forces in a firm's external environment?
the family size of the firm's target market
The internet service provider industry in the country of Wakanda is an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms. Thus, in the internet service provider industry, the
threat of new entrants is most likely low.
