BUS/475: Integrated Business Topics Wk 2 - Practice: Ch. 3, External Analysis [due Day 5]

Which of the following statements about industry dynamics is true?

The five forces model is a static model. Over time, industry structures are not stable.

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.)

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

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

an industry analysis

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.

buyers

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

buyers suppliers the threat of substitutes

A company is a complementor to your company if ______.

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

Michael Porter developed the five forces model to help firms do which of the following? (Check all that apply.)

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

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

interdependent

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

legal

Managers have ______ direct influence over external forces in the firm's general environment than those in the firm's task environment.

less

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

limits to the industry's profit potential

Which of the following contribute to consumer buying power?

low switching costs real time, accurate price comparisons

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

mobility barriers

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

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

political

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

potential competitors will enter a given industry

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 that videoconferencing presents to business travel.

substitutes

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 insight into a firm's strategic position within an industry a rigorous way of identifying the industry's profit potential

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

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

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.)

Reconfiguring value chains Establishing a niche Leverage existing assets

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

by demanding higher quality by obtaining price discounts 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

Growth rates, interest rates, and levels of employment would be considered ______ factors in a firm's general environment.

economic

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

powerful

The intensity with which companies in an industry jockey for market share and profitability is known as ___.

rivalry

Which of the following statements about Airbnb is correct?

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

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

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

government bodies

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

growth rates price stability interest rates

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

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

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

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

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

lean manufacturing

Which of the following are factors in a firm's legal environment? (Check all that apply.)

mandates regulations laws

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

Place the three frameworks used in industry analysis in the order they should be used, with the first at the top.

1) PESTAL Analysis 2) Porter's five forces 3) Strategic group mapping

True or false: Sociocultural factors tend to be fixed.

False. Sociocultural factors tend to be in flux.

In addition to the static nature of the PESTEL, Porter's five forces, and strategic group mapping frameworks, what is their other shortcoming?

It does not help us understand why there are performance differences among firms in the same strategic group.

Which of the following reduces profit margins for air carriers?

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

Which of the following are ways that powerful suppliers are a threat to firms? (Check all that apply.)

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

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

a function of five forces related to competition

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

threat of entry

The _______ is the idea that products or services available from outside the given industry will come close to meeting the needs of current customers.

threat of substitutes

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

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

an ecological

Which of the following contribute to consumer buying power?

real time, accurate price comparisons low switching costs

The pressure of rivalry increases when which of the following forces increase in intensity? (Check all that apply.)

the power of buyers and suppliers the threat of substitutes the threat of entry