CH. 3 QUIZ

Ez Solutions Inc. has been operating in the country of Jamtland for almost a decade. The nation is currently experiencing an economic downturn. Which of the following is the most likely benefit of this economic condition for Ez Solutions Inc.?

Ez Solutions Inc. will have better access to highly skilled human capital at a lower cost

Which of the following firms most likely has the lowest bargaining power as a buyer?

a cell phone company that requires highly customized software for its phones

Which of the following real-world examples best supports the statement that strategic commitments to a specific industry may be the result of political rather than economic considerations?

a number of European governments created Airbus through direct subsidies to provide a countervailing power to Boeing

Generally speaking, which of these situations is likely to lead to greater profits?

an industry with fewer but larger competitors

Strategic-group mapping establishes that

competitive rivalry is strongest between firms that are within the same strategic group

Some scholars have added a sixth force to Porter's Five Forces model. This sixth force, ________, is believed to add value to the original product offering (or service) when the two are used in tandem.

complement

Which of these is a way to reconfigure a value chain?

entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups

A fragmented industry turns into a consolidated industry when

firms reduce competition within the industry through mergers and acquisitions

MicroChips Corp. is a company that supplies microprocessors to 2020 Processors Inc., a computer hardware company. When 2020 Processors Inc. demands lower prices for the microprocessors, MicroChips Corp. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from MicroChips Corp., 2020 Processors Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, MicroChips Corp., as a supplier, has exercised its bargaining power by threatening to

forward integrate

The relative bargaining power of suppliers is most likely low when

incumbent firms face low switching costs when changing suppliers

ABC Hardrives Inc., All Digital Inc., and FastFax Corp. are all companies that manufacture and sell consumer electronics. They procure their component parts from a similar set of suppliers in China and sell the final product to customers with similar needs. Thus, the three companies together are a part of a(n)

industry

The amount that savers are paid for use of their money and the amount that borrowers pay for that use is best described as a(n)

interest rate

Which of the following is a feature of a fragmented industry?

it consists of many small firms

Which of the following statements is true of an oligopoly?

it is often analyzed using game theory

__________ are industry-specific factors that separate one strategic group from another

mobility barriers