Chapter 3

Generally speaking, which of these situations is likely to lead to greater profits? an industry that is about to undergo deregulation a situation that encourages operating at excess capacity a fragmented industry rather than a consolidated one an industry with fewer but larger competitors

an industry with fewer but larger competitors

Strategic group mapping establishes that competitive pressures within an industry are similar among all strategic groups. competitive rivalry is strongest between firms that are within the same strategic group. product features and prices are irrelevant to a strategic group. rivals inside a strategic group serve different customers.

competitive rivalry is strongest between firms that are within the same strategic group.

Which of these is a way to reconfigure a value chain? thinking about new combinations of resources and capabilities that a firm already possesses, such as repurposing a movie theater as a location for off-site corporate meetings creating a partnership through strategic alliances, such as a bakery partnering with a restaurant preparing to leave an industry rather than supply unreliable or substandard products to customers entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups

entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups

Qwik Process Inc. is a company that supplies microprocessors to Nuevono Inc., a computer hardware company. When Nuevono Inc. demands lower prices for the microprocessors, Qwik Process Inc. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from Qwik Process Inc., Nuevono Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, Qwik Process Inc., as a supplier, has exercised its bargaining power by threatening to forward integrate. crowdsource. outsource. backward integrate.

forward integrate.

The relative bargaining power of suppliers is most likely low when the suppliers provide products that are differentiated. incumbent firms face low switching costs when changing suppliers. there are no readily available substitutes for the products and services they offer. the suppliers' industry is more concentrated than the industry it sells to.

incumbent firms face low switching costs when changing suppliers.

Which of the following statements is true of an oligopoly?

It is often analyzed using game theory.

Incumbent firms can benefit from several important sources of entry barriers. Economies of scale are one such source. Which of the following is an implication of economies of scale for incumbent firms? They cannot employ technology efficiently. They can spread fixed costs over lesser units. They benefit from a less specialized division of labor. They can demand better terms from their suppliers.

They can demand better terms from their suppliers.