QUIZ - Chap 3

Which of the following conditions is most likely to cause fierce rivalry between competitors of an industry?

Select one: a. Competition is based on the uniqueness of the industry's offerings b. Competitors are differentiated from each other c. THE GROWTH RATE OF DEMAND FOR THE INDUSTRY'S OFFERINGS IS LOW Correct d. Exit barriers in the industry are low e. Fixed costs in the industry are low

A farmer realizes that he is not getting fair price from the agents who buy produce from him and sell it to the markets. As such, he decides to sell produce directly to the local market. This is an example of:

Select one: a. FORWARD VERTICAL INTEGRATION Correct b. backward vertical integration c. horizontal diversification d. forward horizontal integration e. backward horizontal integration

_____ analysis is an important tool that executives can rely upon to organize factors within the general environment and identify how these factors influence industries and the firms within them.

Select one: a. Five forces b. BCG matrix c. SWOT d. Porter's e. PESTEL Correct

Piracy of intellectual property poses a threat to businesses that create such properties in order to profit from them. This example represents the _____ segment of PESTEL analysis.

Select one: a. LEGAL Correct b. environmental c. economic d. political e. social

Which of the following segments of PESTEL analysis includes elements such as inflation rates, unemployment rates, and levels of disposable income?

Select one: a. Political b. ECONOMIC Correct c. Social d. Environmental e. Technological

Which of the following groups consists of a set of industry competitors that have similar characteristics to each other but differ in important ways from the members of other groups?

Select one: a. STRATEGIC Correct b. PESTEL c. SWOT d. niche e. collaborative

Buyers are more likely to be powerful relative to the firms from which they purchase goods and services if:

Select one: a. THE INDUSTRY'S GOOD OR SERVICES ARE STANDARDIZED OR UNDIFFERENTIATED Correct b. the good or service purchased by the buyers represents a negligible percentage of the buyer's costs. c. the good or service is of significant importance to the quality or price of the buyer's offerings. d. buyers face high switching costs in changing vendors. e. there are relatively few firms supplying the industry compared to the number of buyers.

Which of the following segments of PESTEL analysis includes cultural trends such as attitudes toward obesity and consumer activism?

Select one: a. Technological b. Economic c. Environmental d. SOCIAL Correct e. Political

Which of the following segments of PESTEL analysis includes elements such as tax policies and changes in trade restrictions and tariffs?

Select one: a. Technological b. POLITICAL Correct c. Economic d. Environmental e. Social

New entrants are more likely to join an industry if:

Select one: a. access to distribution channels is limited. b. EXISTING COMPETITORS LACK ECONOMIES OF SCALE Correct c. expected retaliation from existing competitors is high. d. differentiation among existing competitors is high. e. capital requirements to enter the industry are high.

Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:

Select one: a. access to distribution channels is limited. b. THE SUPPLIERS' INDUSTRY IS HIGHLY CONCENTRATED Correct c. cost advantages independent of size are negligible. d. existing suppliers lack economies of scale. e. differentiation among existing suppliers is high.

New entrants are more likely to join an industry if:

Select one: a. capital requirements to enter the industry are high. b. expected retaliation from existing competitors is high. c. access to distribution channels is limited. d. DIFFERENTIATION AMONG EXISTING COMPETITORS IS LOW Correct e. switching costs for consumers are high.

The likelihood of new entrants joining an industry is low if switching costs are high because:

Select one: a. each incumbent has a group of loyal customers that enjoy its unique features. b. new entrants struggle to get their offerings to customers. c. THIS DISCOURAGES CUSTOMERS FROM BUYING A NEW ENTRANT'S OFFERINGS Correct d. new entrants struggle to gather enough cash to get started. e. new entrants struggle to match incumbents' prices.

Michael Porter's five forces analysis is an important tool:

Select one: a. for evaluating profit potential of an organization's various business units or product lines. b. that considers a firm's strengths and weaknesses along with the opportunities and threats that exist in the firm's environment. c. for organizing factors within the general environment and identifying how these factors influence industries and the firms within them. d. FOR ANALYZING HOW MUCH PROFIT POTENTIAL EXISTS IN AN INDUSTRY Correct e. for executives to analyze strategic groups in order to understand gaps in the industry that represent untapped opportunities.

The general environment, a component of the environment of an organization, is also called the:

Select one: a. micro-environment. b. competitive environment. c. meso-environment. d. MACRO-ENVIRONMENT Correct e. common environment.

Buyers are more likely to be powerful relative to the firms from which they purchase goods and services if:

Select one: a. the good or service is of significant importance to the quality or price of the buyer's offerings. b. THE the good or service purchased by the buyers represents a high percentage of the buyer's costs. Correct c. buyers face high switching costs in changing vendors. d. the industry's goods or services are highly differentiated. e. there are relatively few firms supplying the industry compared to the number of buyers.

Rivalry between competitors of an industry tends to be fierce when:

Select one: a. the growth rate of demand for the industry's offerings is high. b. COMPETITORS ARE NOT DIFFERENTIATED FROM EACH OTHER Correct c. fixed costs in the industry are low. d. exit barriers in the industry are low. e. competition is based on the uniqueness of the industry's offerings.