Quiz 5 Strat man
Which of the following firms will most likely NOT be a complementor to a firm that manufactures computers?
A company that manufactures its own brand of desktops and laptops
Which of the following factors best contributes to the U.S. automotive industry being characterized by high entry barriers?
Car manufacturers require large-scale production in order to be cost-competitive.
Which of the following is a feature of a monopolistically competitive industry?
Differentiated products
Which of the following is a primary feature of the five forces model?
It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.
Which of the following is likely to happen due to horizontal mergers between competitors such as Delta and Northwest airlines?
The overall industry profitability will increase.
In the aircraft manufacturing industry for large commercial jets, Boeing and Airbus are the only competitors. There is not a significant threat of entry because:
entering the aircraft manufacturing industry requires huge capital investments.
A strategic group will typically include:
firms within the same industry.
Industry convergence is a process whereby:
formerly unrelated industries begin to satisfy the same customer need.
Competitive rivalry based solely on _____ is destructive to firms as it transfers most of the value created in the industry to the customers.
price-cutting
The primary objective of Porter's five forces model is to:
understand the profit potential of different industries.
While implementing strategic group mapping for the U.S. domestic airline industry, two strategic groups become apparent: low-cost, point-to-point airlines (Virgin Atlantic, Alaska Airlines, JetBlue, and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American, Delta, and United). Which of the following statements is true about these two strategic groups?
Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines
_____ are best described as industry-specific factors that separate one strategic group from another.
Mobility barriers
Family Needs Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Family Needs has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate?
Monopolistic competition
Balmia Ammunition Inc., a firm controlled and managed by the government of Balmia, is the only company that has the license to produce defense arms in the country. Which of the following industry competitive structures does this best illustrate?
Monopoly
Which of the following statements is true about strategic groups?
Profitability varies between different strategic groups.
Why do firms operating in a monopolistically competitive industry have the power to raise the prices of their products or services?
The firms can differentiate their product offerings.
Which of the following statements is NOT true about the five forces in Porter's competitive analysis model?
The stronger the five forces in an industry, the greater the industry's profit potential.
Fashion magazines increasingly face competition from fashion blogs on the web. This phenomenon best illustrates which one of the competitive forces?
The threat of substitutes
Earlier, the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets, and hotels for their customers. However, with the emergence of the Internet, smaller travel agencies started mushrooming in the industry and customers started making their own reservations. Which of the following can be inferred from this information?
The travel industry changed from a consolidated structure to a fragmented one.
Which of the following is a characteristic of a fragmented industry?
There are many small firms.
How would cumulative learning and experience effects of industry incumbents most likely affect the five competitive forces in an industry?
Threat of new entrants would be low
Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, All Needs decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through _____.
backward integration
In an industry, the threat of entry is high when:
capital requirements are low.
A company is best described as a _____ to an existing company if customers value the existing company's product or service offering more when they are able to combine it with the other company's product or service.
complementor
A fragmented industry is made into a consolidated industry through:
horizontal mergers and acquisitions.
Curry Rush is a premium Asian restaurant chain that differentiates itself from a large number of competitors by providing exclusively organic Vietnamese cuisine. It has some pricing power because it provides differentiated products and therefore, has some entry barriers in place. In this scenario, Curry Rush is most likely operating in a(n) _____.
monopolistically competitive industry