Chapter 3

Industry structures are not stable over time. The U.S. banking industry has seen major consolidation in recent years. We would expect the result of this dynamic change to be what?

Generally higher industry profits

The objective of Porter's five forces model is to:

assess the potential for profits within an industry.

Strategic group mapping, such as Exhibit 3.5, shows us that:

competitive forces in an industry favor some strategic groups while threatening others.

A ____________ is a product or service that can help raise demand in an industry by indirectly enhancing performance or decreasing prices.

complement

All of the following are aspects of sociocultural factors influencing industry attractiveness EXCEPT:

environmental protection laws.

Exit barriers are obstacles that determine how easily a firm can leave the industry. When exit barriers are high, what happens to industry attractiveness?

it decreases

A ____________ is created when the government believes the product or service would not be supplied by the market under free market conditions.

natural monopoly

As conveyed in exhibit 3.1, GENERAL macro-environmental PESTEL factors DIRECTLY impact _______.

the industry.