Capstone Chapter 3 Quiz

Mara is a management consultant for a soda manufacturer that wants to expand into health drinks such as green tea and after-workout drinks. Based on what you have read, which of these is sensible advice for Mara to offer her client?

"Carefully consider the entry choices over time before making a decision."

The ________ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment.

PESTEL framework

A rule of thumb with Porter's 5 forces is the weaker the force, the higher the industry's profit potential (the higher the ability to generate profits) thus making the industry more attractive for competitors.

True

A video-streaming service provider such as Netflix is a complement to a manufacturer of streaming video devices such as Roku.

True

In an industry, the threat of entry is high when ___________.

capital requirements are low

Companies in the same strategic group are ________ to each other.

direct competitors

The internet service provider industry in the country of Megalopolis 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

During an interview for a CEO position, Elena'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."