BA: CH 4 External Analysis

Which of the following statements regarding a business's competitive advantage are true? (check all that apply)

A competitive advantage must provide the opportunity to be more profitable that competitors.

What is the key to effective opportunity recognition by an entrepreneur?

A detailed understanding of the external environment.

Which of the following are potential sources of a business's competitive advantage? (check all that apply)

A unique structural business attribute

Which of the following are examples of sources where an opportunity may come from?

A vacancy at the perfect location for a business

A competitive ____________________ is the edge a business has over competing businesses.

Advantage

The product or service must meet ____________ in order to develop into a competitive advantage.

All four of the criteria ( rare, durable, relatively non-substitutable, and valuable.

Which of the following are potential sources of a business's competitive advantage? (check all that apply)

An activity that the business does best.

Conducting a resource-based analysis will help entrepreneurs _________.

Better understand what creates the business's advantage

An effective industry analysis starts by identifying every potential __________________ within a defined distance of the new businesses location.

Competitor

Entrepreneurs should define the industry broadly enough to be inclusive of all potential ___________________.

Competitors

__________________ markets are those markets that have no clear dominant competitor and are made up of a large number of similar sized companies.

Fragmented

Which of the following statements are true about developing a competitive map? (check all that apply).

It should be developed by the entrepreneur.

Which of the following statements regarding a business's competitive advantage are true? (check all that apply)

New businesses need to develop one or several fundamental characteristics with which it is exceeds the industries performance.

Which of the following statements regarding a business's competitive advantage are true? (check all that apply)

New businesses rarely perform better than competitors in all areas

"Relatively ___________" is a determination about whether a service or a product may be easily substituted by something else that a competitor could provide.

Non-substitutable

Resource-based analysis examines which of the following criteria that products or services must meet?

Rare

________________ products perform similar function or achieve the same result, but are not imitation.

Substitute

Which of the following are the three elements that describe how durability helps businesses hold onto the competitive advantage?

The desire of competitors to compete with the business using the same potential resource or capability.

Which of the following are criteria that should be considered in developing a competitive map? (check all that apply).

The facility's square footage.

Reliable industry-specific information can be found in which of the following sources (check all that apply).

The internet

Which of the following are the three elements that describe how durability helps businesses hold onto the competitive advantage?

The length of time that a business might be able to gain and hold a competitive advantage.

Which of the following are criteria that should be considered in developing a competitive map? (check all that apply).

The pricing of products.

Which of the following are criteria that should be considered in developing a competitive map? (check all that apply).

The quality and availability of parking.

Which of the following statements are true about the normal or ordinary parts of a business?

There is little reason to do any of the normal or ordinary parts of a business better than the average in the industry

An important part of a competitors analysis is gaining and understanding of the industry's ____________________.

Trends

Products that are not _________ will not provide the business with returns in excess of what competitors earn from their sale.

Valuable

Resource-based analysis examines which of the following criteria that products or services must meet?

Valuable

A competitive advantage creates ________________.

Value

A common cause of new business failure is _____________ on its competitive advantage.

a lack of focus

Investments in businesses that are not easily recovered are considered ______________.

an exit barrier

Determining a reasonable distance that customers will be willing to travel is more of a __________ than a _____________.

art; science

Entrepreneurs should be ______________ in defining their customers

as accurate as possible

What provides a competitive advantage in one industry ______ and __________ with time.

is different from other industries; varies

Trends shape the ________ - term prospects of the given industry.

long

Products or services that are relatively _________________ are those that competitors cannot easily substitute.

nonsubstitutible

The primary purpose of the NAICS code is to help_________.

the government gather, track, and publish data on specific industries.

Data that are aggregated on a national level may have limited value to entrepreneurs ___________.

who are interested only in customers from their local area

A(n) _________ keeps an entrepreneur from leaving a business he or she invested in.

exit barrier

A(n) _____________________ is defined as those direct competitors that sell similar products or services within a specified geographic radius that customers are willing to travel.

Industry

Associations exist to support and promote their _________________.

Industry

NAICS

North American Industry Classification System

Which of the following statements regarding exact or direct competitors are correct?

Often, direct competitors are geographically local.

Entrepreneurs can create a list of competitors that customers can find _________________ when there is no physical restriction to the business's operation.

On the internet electronically

Which of the following statements regarding developing competitive maps are true?

One must take a customer perspective from a series of visits

The entrepreneurs local area may be doing well, while other areas around the country are doing _____________.

Poorly

Which of the following are examples of sources where an opportunity may come from?

A new technological advancement

Elasticity of demand is the ____________.

consumers response to price changes

Most all businesses that directly compete with well-established firms operate at a _____________.

cost disadvantage and must compete on some other basis.

____________________ analysis is a theoretical approach and practical methodology that examines business functions in terms of whether a product or service meets the criteria of being rare, durable, non substitutable, and valuable simultaneously.

Resource-based

Reliable industry-specific information can be found in which of the following sources (check all that apply).

Magazines

When entrepreneurs can easily exit an industry, the intensity of industry competition tends to ____________.

decrease and the threat posed by new entrants is reduced.

Resource-based analysis examines which of the following criteria that products or services must meet?

Durable

Which of the following are examples of sources where an opportunity may come from?

A personal frustration

Industry ____________ exist for nearly any industry and often exist at the state, national, and even international levels.

Associations

In developing a competitive map, entrepreneurs should _______________.

Determine key competitive factors they wish to understand.

Which of the following statements regarding exact or direct competitors are correct?

Direct competitors can be easily found in the local telephone book.

Identify the critical steps in examining the nature of the external environment of a business.

Draw a set of competitive maps

Which of the following statements regarding developing competitive maps are true?

Entrepreneurs must develop a list of criteria that they wish to take away from their visits to customers.

Which of the following statements regarding developing competitive maps are true?

Entrepreneurs should visit all potential competitors.

Which of the following must a competitive advantage do in order to be valuable to the business?

Help the business earn more profits than competitors

Which of the following statements regarding exact or direct competitors are correct?

Identifying direct competitors is easier when entrepreneurs are clear regarding their customers needs.

Identify the critical steps in examining the nature of the external environmental of a business

Research the competitors within the industry that one expects to do business.

Identify the critical steps in examining the nature of the external environment of a business.

Research the industry in which one expects to do business.

Which of the following statements are true about the normal or ordinary parts of a business?

They must be done and done well

Which of the following areas provide a business with a competitive advantage?

Those that allow the business to charge a higher price

Which of the following areas provide a business with a competitive advantage?

Those that draw new customers when the price is the same as competitors.

A company's ________________________________ is made up of those things that the company does uniquely well or better than anyone in the same industry.

competitive advantage

Which of the following are the three elements that describe how durability helps businesses hold onto the competitive advantage?

How long it would take or a competitor to imitate the product/service or to wash away the business's advantage.

A competitive map________________________________.

Is an analytical tool that helps entrepreneurs compare competitors based on a set of criteria.

Which of the following statements are true about developing a competitive map? (check all that apply).

It is a step in external analysis.

Which of the following statements are true about developing a competitive map? (check all that apply).

Its purpose is to better understand competitors and their capabilities.

Reliable industry-specific information can be found in which of the following sources (check all that apply).

Journals

Understanding the business's competitive advantage is the _________________ step in an external analysis.

Last

Which of the following areas provide a business with a competitive advantage?

Those that help the business create a lower cost structure

Benchmarking is

Working with and learning from a company outside of your industry that has a particular skill that is potentially critical to your operation.