Book Questions - Chapter 3

The pressure of rivalry increases when which of the following forces increase in intensity? -the power of buyers/suppliers -the threat of substitutes -the barriers of entry -the threat of entry

-the power of buyers/suppliers -the threat of substitutes -the threat of entry

when suppliers do not depend heavily on the industry for a large portion of their revenues, the power of suppliers is _________.

high

The pace of technological change seems to be_______

increasing

A firm's strategic position relates to its ability to create ______ for customers while containing the ______ to do so.

value;Cost

Which of the following statements is likely to be true about a fragmented industry? -it consists of small firms -it has a very low competitive structure -it consists of only a few firms -it has high profitability

-it consists of small firms

which of the following are considered nonmarket strategies? -public relations -lobbying -litigation -advertising

-public relations -lobbying -litigation

Managers are able to influence which of the following types of external forces?

-strategic groups -something else?

An industry analysis provides which of the following/ -the level of profitability that can be expected for the average firm in the industry -insight into a firm's strategic position with an industry -a rigorous way of identifying the industry's profit potential -the stability of the firm's internal structure

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

Although _________ coordinate such as price fixing is illegal in the US ______- coordination such as "an unspoken understanding" is not.

Explicity; Tacit

The cultures, norms and values of the society in which a firm competes are considered _________ factors

Sociocultural

Which of the following are monopolistically competitive indsutry? a differenitated product the ability ot raise prices for differenetiated products obstacles to entry very few competing firms

a differenitated product the ability ot raise prices for differenetiated products obstacles to entry

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 price takers engage in monopololistic behavior engage in co-opetion are interpendent

are interdependent

Firms have a tendency to change the industry structure in their favor, for example by making industries more _______ through mergers and acquisitions consolidated intuitive competitive diffuse

consolidated

ESPN starting a Spanish-language television channel called ESPN Deportes is an example of how companies react to the ______ trend that the Hispanic population in the US sees their income rising and is growing fast

demographic

Firms within the same strategic group are _____ competitors

direct

the weaker the five forces in Porter's model, the ________ the industry's profit potential lower greater less differentiated less certain

greater

price ___ is the lack of change in price levels of goods and services

stability

A(n) ______ group is a set of companies within a specific industry that seek to achieve competitive advantage in similar ways.

strategic

The threat of _______ is one of the five forces and can be exemplified by the threat of videoconferencing presents to business travel

substitutes

the threat of ______ is one of the five forces and can be exemplified by the threat of videoconferencing presents to business travel.

substitutes

Which of the following is not a characteristic of industries that are monopolies? they tend to have a high cost of entry they typically have low profits they often have one large firm they have only one firm

they typically have low profits

In the PESTEL model, political factors are those that relate to _______. government bodies banking organizations climate and weather employment

government bodies

the relationship between the natural environment and business organization can best be described as _______ unconnected interdependent a U-Shape insignificant

interdependent

Deregulation of industries lead to intensified competition and higher value at lower prices for consumers. This is an example of ________ factors influencing business economic socio-cultural technological legal

legal

Recessions are less likely to harm ____________ - cost airlines, which appeal more to budget conscious travelers than legacy carriers.

low

The threat of entry is high when capital requirements are ________ in comparison to the expected returns

low

Which of the following are the four main competitive industry structures? (check all that apply.) -monopolistic oligopoly -perfect competition -monopoly -oligopoly -monopolistic competition -perfect monopoly

-perfect competition -monopoly -oligopoly -monopolistic competition

the amount that savers are paid for sue of their money and the amount that borrowers pay for that use is know as ____ a currency rate an interest rate an economic boom a level of employment

an interest rate

The pressure that industry suppliers can exert on an industry's profit potential, is also called the _________. bargaining power of buyers threat of new entry rivalry amongst existing competitors bargaining power of suppliers

bargaining power of suppliers

Michael Porter developed the five forces model to help firms do which of the following? -understand the strengths and weaknesses of a firm's resources -gain and sustain a competitive advantage -determine the profit potential of different industries -analyze PESTEL forces

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

Which of the following have helped increase the rate of convergence in the media industries? -Telecommunications advance -digital media -improved IT -new kinds of delivery vans

-Telecommunications advance -digital media -improved IT

A firm's strategic position relates to its ability to create _________ for customers while containing the _______ to do so.

Value; Cost

The power of ________ is the pressure they can put on the margins of producers in the industry by demanding a lower price or higher product quality. supplier new entrants buyers existing competitors

buyers

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

slow or negative

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), she will incur insignificant customer ______ costs

switching

which of the following statements about industry dynamics is true? -the five forces model takes into account industry dynamics -over time, industry structures are not stable -firms in an industry have a tendency to fragment in order to increase profitability -the five forces model is a static model

-over time, industry structures are not stable -the five forces model is a static model

According to the five forces model, a firm seeking to compete in an established industry should seek to do which of the following? (check all that apply.) -partner with the most established company possible -Ignore the strength of competitive forces and focus on functional strategy -position itself in a way that relaxes the constraint of strong forces -position itself in a way that leverages weak forces

-position itself in a way that relaxes the constraint of strong forces -position itself in a way that leverages weak forces

which of the following help determine competitive industry structure? -size and number of competitors -height of entry barriers -the firm's resources -firms' degree of pricing power -composition of the board of directors

-size and number of competitors -height of entry barriers -firms' degree of pricing power

Which of the following statements about industry dynamics is true? -firms in an industry have a tendency to fragment in order to increase profitability -The five forces model is a static model -over time, industry structures are not stable -the five forces model takes into account industry dynamics

-The five forces model is a static model -over time, industry structures are not stable

Which of the following are forces in porter's Five forces model? -bargaining power of buyers -threat of new entrants -differentiated price parity -revered oligopoly -threat of substitute products or services

-bargaining power of buyers -threat of new entrants -threat of substitute products or services

Which of the following are important sources of entry barriers? -credible threat of retaliation -network effects -capital requirements -the high profitability of a particular industry -economies of scale -government policy

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

A company is a complementor to your company if -customers private label your product -that company praises your company for excellence -customers value your product more when they can use it with the other company's product -the market is fragmented and you can gain solidarity with a former rival

-customers value your product more when they can use it with the other company's product

Which of the following are examples of economic factors in the firm's general environment? -technological advancements -growth rates -interests rates -price stability -government regulations

-growth rates -interests rates -price stability

Which of the following are ways in which the power of buyers affects producers? -by demanding higher quality -by reducing economies of scale -by requesting more serivce -by obtaining price discounts

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

Which of the following are characteristics of perfectly competitive industry? -individual firms have little or no ability to raise prices -consumers make purchasing decisions based on product features -firms in the industry sell a commodity product -the industry is fragmented

-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 tend to result from strong competitive rivalry? -a reduction in the threat of substitutes -industry-wide price increases -limits to the industry's profit potential -less product differentiation

-limits to the industry's profit potential

which of the following are examples of sociocultural factors? -the growth of the Hispanic population -an extended period of low interest rates -the widespread adoption of smart phones -an increased demand by consumers for gluten-free products

-the growth of the Hispanic population -the widespread adoption of smart phones -an increased demand by consumers for gluten-free products

In an oligopoly, which of the following conditions exist? (check the three that apply.) -abundant commodity products -high barriers to entry -differentiated products -a few large firms

-high barriers to entry -differentiated products -a few large firms

According to Porter's model, which of the following should be considered when analyzing a firm's competition? (check all that apply) buyers the regulations in possible host countries suppliers the threat of substitutes

- buyers -suppliers -threat of substitutes

Which of the following are ways that powerful suppliers are a threat to firms? -they can reduce the industry's profit potential -they can capture part of the economic value created by firms. -they can drive away the consumer market directly -they can force the cost of production to increase

-they can reduce the industry's profit potential -they can capture part of the economic value created by firms. -they can force the cost of production to increase

In a perfectly competitive industry, firms have difficulty ______. achieving competitive advantage keeping prices low avoiding profitability making purchasing decisions

achieving competitive advantage

A computer hardware industry is an example of ___________ an oligopoly a natural monopoly monopolistic competition perfect competition

monopolistic competition

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

an example of a recent innovation in PROCESS technology is______ the smartphone nanotechnology the microwave the BP oil spill

nanotechnology

In order to influence changes in their political environment, firms pursue __________.

nonmarket strategies

In the group of external factors that form the PESTEL model the "P" stands for ______ and the "L" Stands for ______-

p - political , L- legal

Exit barriers, strategic commitments, and competitive industry structure are important factors in determining the intensity of _____

rivalry

The intensity with which companies in an industry jockey for market share and profitability is known as ________. indentification barriers threats rivalry

rivarly

The cost advantage that a firm obtains by increasing output, such as by spreading fixed costs over more units, are called economies of ______

scale

A(n) ________ group is a set of companies within a specific industry that seek to achieve competitive advantage in similar ways.

strategic

the risk that potential competitors will enter the industry is known as the _______. rivalry among existing competitors threat of entry threat of substitutes power of suppliers power of buyers

threat of entry

Which of the following conditions lead to a strong threat of subtitutes? -when new firms lack a cool facotr when the price-performance trade off is attractive when the established firms have many loyal customers when the cost of switching to the subsitute is low

when the price-performance trade off is attractive when the cost of switching to the subsitute is low