BCOR exam 3

Which of the following are examples of economies of scale? (Check all that apply.)

Having more negotiating power vis-à-vis suppliers Spreading fixed costs over more units

Which of the following are essential questions that strategic leaders need to consider to increase the probability of entering an industry successfully? (Check all that apply.)

How to enter? When to enter? What type of entry should be made? Who are the players?

Which of the following are characteristics of a perfectly competitive industry? (Check all that apply.)

Individual firms have little or no ability to raise prices. Firms in the industry sell a commodity product. The industry is fragmented.

Which of the following statements about Airbnb is correct?

It handles more accommodations than the three biggest hotel chains combined.

Which of the following reduces profit margins for air carriers?

Large corporate customers contracting with the U.S. airline industry

The threat of entry is high when capital requirements are_____________ in comparison to the expected returns.

Low

What is the result of low barriers to entry in the airline industry?

New airlines join the market from time to time.

Which of the following statements about legal factors as an external force is true?

Regulatory changes tend to affect entire industries at once.

Which of the following are characteristics of the companies in a strategic group? (Check all that apply.)

The companies differ in important dimensions from companies in other strategic groups. The companies form part of a specific industry. The companies pursue similar strategies.

Which of the following are examples of sociocultural factors? (Check all that apply.)

The growth of the Hispanic population An increased demand by consumers for gluten-free products

What conclusions can be reached about the airline industry using the five forces framework?

The supporting players, such as airports and aircraft suppliers, are quite profitable. The mega-airlines must constantly struggle to achieve consistent profitability.

The pressures that industry suppliers can exert on an industry's profit potential, is also called the ______.

bargaining power of suppliers

A rise in economic growth is reflected by ______.

businesses expanding operations to satisfy demand

According to Porter's model, which of the following should be considered when analyzing a firm's competition? (Check all that apply.)

buyers the threat of substitutes suppliers

Production costs can increase when ______.

buyers demand higher quality and more service

Which of the following are ways in which the power of buyers affects producers? (Check all that apply.)

by obtaining price discounts by demanding higher quality by requesting more service

The external forces called technological factors ______.

capture the application of knowledge to create new process and products

A ______ is a product or service that adds value to the original product offering.

complement

In an oligopoly, which of the following conditions exist? (Check the three that apply.)

differentiated products high barriers to entry a few large firms

It might be a good idea to expand or upgrade a firm's human capital base during a ______, because unemployment is high and therefore human capital is abundant and wages usually _____.

downturn; fall

In the early 2000s, easy credit made real estate the investment of choice in the United States. By the end of the decade, however, a recession had set in, impacting almost all businesses in the country. This example shows that _____.

economic boom periods can overheat and lead to speculative bubbles

Cost advantages that accrue for firms with larger output because they can spread fixed costs over more units and can employ technology more efficiently are called ______.

economies of scale

Which of the following are important strategic dimensions in mapping strategic groups? (Check all that apply.)

expenditures on research and development product and service offerings cost structure

Although ______ coordination, such as price fixing, is illegal in the United States, ______ coordination such as "an unspoken understanding" is not.

explicit; tacit

Which of the following does the five forces model to help firms do?

gain and sustain a competitive advantage determine the profit potential of different industries

In the PESTEL model, political factors are those that relate to ______.

government bodies

What are the three aspects of mapping strategic groups?

graphing the firms in the strategic group and indicating each firm's market share identifying the most important strategic dimensions choosing two key dimensions for the horizontal and vertical axes

The relationship between the natural environment and business organizations can best be described as ______.

interdependent

The economic factors that affect a firm's external environment are ______.The

largely macroeconomic

Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of ______ factors influencing business.

legal

Which of the following tend to result from strong competitive rivalry?

limits to the industry's profit potential

Which of the following tend to result from strong competitive rivalry? Multiple choice question. industry-wide price increases

limits to the industry's profit potential

When managers understand the forces in the external environment, they are better able to ______.

mitigate threats and leverage opportunities

In the airline industry, the ______________ of offering international routes restricts movement between hub-and-spoke and point-to-point airlines.

mobility barrier

Industry-specific factors known as ______ separate one strategic group from another.

mobility barriers

Many firms of all sizes actively compete in the computer hardware industry, and there are no firms with a large market share. Product offerings tend to be similar but are differentiated in ways that enable some firms to raise or impact pricing. The computer hardware industry is an example of ______.

monopolistic competition

As utility companies tend to serve a whole market exclusively, they are known as ______ because the governments involved believe that the product or service would not be supplied otherwise.

natural monopolies

A ______ occurs when a firm has accrued significant market power and is changing the industry structure in its favor.

near monopoly

The positive effect that one user of a product or service has on the value of that product or service for other users is known as the ___.

network effect

Which of the following are important sources of entry barriers? (Check all that apply.)

network effects economies of scale capital requirements government policy credible threat of retaliation

Which of the following are characteristics of a monopolistically competitive industry? (Check all that apply.)

obstacles to entry a differentiated product the ability to raise prices for differentiated products

Although the five forces model is useful in understanding an industry's profit potential, it provides only a ___.

point-in-time snapshot of a moving target

In the five forces model, threat of entry refers to the risk that ______.

potential competitors will enter a given industry

When suppliers can demand higher prices for their inputs or reduce the quality of the input factor delivered, they demonstrate that they are ______.

powerful

Which of the following are examples of economic factors in the firm's general environment? (Check all that apply.)

price stability growth rates interest rates

Firms are able to create a near monopoly by maximizing ______.

product differentiation

The economic recession that began in 2008 in the United States was the result of unwise investment in ______.

real estate

Which of the following contribute to consumer buying power?

real time, accurate price comparisons low switching costs

Along which of the following dimensions do strategic groups differ from one another? (Check all that apply.)

research and development distribution channels market segments customer service

Core competencies of a business are generated by the interaction of ______.

resources and capabilities

Price discounts, frequent new product releases with minor modifications, and intense promotional campaigns are all tactics indicative of an industry with ______ growth.

slow or negative

The expected competitive intensity is stronger when the other four forces are ______, and weaker when the other four forces are ______.

stronger; weaker

If a business considers changing vendors, but doing so would require that business to alter product specifications, retrain employees, and/or modify existing processes, we would say the business faces significant ______.

switching costs

When a person that has been using a PC with a Microsoft Windows operating system starts using an Apple computer (which has a different operating system), that person will incur significant customer ______________.

switching costs

An industry analysis provides which of the following? (Check all that apply.)

the level of profitability that can be expected for the average firm in the industry a rigorous way of identifying the industry's profit potential insight into a firm's strategic position within an industry

Managers are able to influence which of the following types of external forces? (Check all that apply.)

the structure of their industry strategic group composition

Which statement best describes entry barriers in the airline industry?

they are relatively low

The risk that potential competitors will enter the industry is known as the ______

threat of entry

Governments sometimes set up a natural monopoly when a venture ______.

would otherwise not be profitable

The online auction site eBay has more than 100 million active users, so buyers are more likely to find what they are looking for while sellers are more likely to find buyers for the items they are offering. This is an example of __.

network effects

In a period of economic boom, unemployment is ______, and human resources become expensive.

low

A perfectly competitive industry has ______ entry barriers and ______ small firms.

low;many

Which of the following are likely outcomes of a competitive rivalry based entirely on price cutting? (Check all that apply.)

most or all value is transferred to customers investments from firms drop off firms struggle to make profits

Which of the following are the four main competitive industry structures? (Check all that apply.)

oligopoly perfect competition monopoly monopolistic competition

Which of the following helped Airbnb develop a successful business in the peer-to-peer rental space? (Select all that apply.)

Ensuring a smooth transaction between hosts and guests Fortuitous timing that led to growing demand Presenting a well-designed website

True or false: Sociocultural factors tend to be fixed.

False

Which of the following are characteristics of a monopolistically competitive industry? (Check all that apply.)

a differentiated product obstacles to entry the ability to raise prices for differentiated products

According to Michael Porter, the profit potential of an industry is ______.

a function of five forces related to competition

When a firm in an oligopoly cuts prices, ______.

a price war is likely to result

In a perfectly competitive industry, firms have difficulty ______.

achieving competitive advantage

Global warming would be an example of ___ factor in a firm's external environment.

an ecological

A group of companies that deal with more or less the same set of suppliers and buyers make up ______.

an industry

The most rigorous means of analyzing the profit potential within a specific industry is to conduct ______.

an industry analysis

When a new firm enters an industry, which of the following often occur? (Check all that apply.)

Industry profit potential declines. Incumbent firms spend more to satisfy customers. Incumbent firms lower prices.

Which of the following are approaches for answering the question "How to enter?" when a firm is considering entering an industry? (Check all that apply.)

Leverage existing assets Establishing a niche Reconfiguring value chains

Firms have a tendency to change the industry structure in their favor, for example by making industries more __ through mergers and acquisitions.

consolidated

______ factors result from the processes and actions of government bodies that influence the decisions and behavior of firms.

Political

The ______ is a measure of the change in the amount of goods and services produced by a nation's economy.

economic growth rate

Exit barriers, strategic commitments, and competitive industry structure are important factors in determining the _____________.

intensity of rivalry

An example of a recent innovation in process technology is ______.

lean manufacturing

Which of the following are examples of commonly encountered capital requirements? (Check all that apply.)

setting up production facilities managing a production process paying for start-up losses

A key feature of an oligopoly is that the competing firms in the industry ______, meaning the actions of any one firm will influence the behaviors of the other firms.

are interdependent