mem 21-40

27. Cooperative pricing is helped by which of the following situations? a)

All of the above

7. Which of following factors should be considered when assessing complements and substitutes? d)

All of the above

10. What term refers to the ability of individual customers to negotiate purchase prices that extract profits from sellers? e)

Buyer power

11. Which of the following factors requires the least consideration when assessing supplier power relative to the downstream industry it sells to? a)

Competitiveness of the output market

5. In which of the following ways can entry erode incumbents' profits? b)

Entrants decrease market concentration

6. Which of the following does not tend to affect the threat of entry? a)

Expectations about pre-entry competition

3. Which of the following best describes the term, internal rivalry? c)

Firms jockeying for share within a market.

24. What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing whether the firm's commitment is likely to result in a product market position in which the firm delivers superior benefits to consumers or operates with lower costs than competitors? a)

Positioning analysis

4. Which of the following conditions does not tend to heat up price competition? b)

Products are differentiated/buyers have high switching costs

2. Which of the following is not a part of the five-forces framework? C)

Regulation

28. What term describes a decision that has a short-term impact and is easy to reverse? b)

Strategic commitment

8. Substitutes erode profits because of which of the following factor? b)

Substitutes divide demand and drive up internal rivalry

9. Why are suppliers in a competitive upstream market said to have "indirect power"? e)

The can sell their services to the highest bidder

1. Which of the following is not a potential limitation of the five-forces framework? d)

The framework provides a structured way to systematically work through wide-ranging and often complex issues

25. How much revenue a firm brings in by improving the quality of a product such that more consumers want to buy it depends on which two factors? a)

The increase in demand caused by the increase in quality and the incremental profit earned on each additional unit sold

12. What concept developed by Brandenburger and Nalebuff as a counterpart to Porter's five-forces consists of suppliers, customers, competitors and complementors? b)

Value net

21. What process involves using computer simulations to track the likely competitive implications of pricing and investment decisions over many years? a) Regression testing b)

War gaming

26. Which of the following best describes a tit-for-tat strategy?

a) A firm is prepared to match whatever change in strategy a competitor makes

23. What term refers to the situation in the used car market where owners are more anxious to sell lowquality cars than high-quality cars?

lemons market

22. What type of option exists when a decision maker has the opportunity to tailor a decision to information that will be received in the future? a)

Real option