Chapter 8

_____ refers to factors that prevent new firms from successfully competing in the industry.

Barriers to entry

A firm's internal environment contains elements that can impact the firm but are generally beyond its direct control.

False

Internal factors are things in the global environment that may impact a firm's operations or success, examples are a rise in interest rates, or a natural disaster.

False

Rivalry is weakest within a strategic group, and the actions of one firm in a group generally does not elicit responses from other group members, as market share in the industry is rarely affected.

False

Strong rivalry in an industry increases the profit potential for all firms because consumers have many firms from which to purchase products or services and can make at least part of their purchasing decisions based on prices.

False

Support activities, according to the value chain, are the actions a firm takes to directly provide a product or service to customers.

False

"I" in VRIO refers to which of these?

Imitation

Which term best describe a group of firms all making similar products or similar services?

Industry

Which of the following SWOT factors are external to the firm?

Opportunities and threats

______ is a tool that reminds managers to look at several distinct categories in the macro environment.

PESTEL

"R" in VRIO refers to which of these?

Rarity

A firm's ______ environment contains elements that can impact the firm but are generally beyond its direct control. These elements are characteristics of the world at large and are factors that all businesses must contend with, regardless of the industry they are in or type of business they are..

macro

Which term describes the process that firms use to study and understand the many different layers and aspects of their competitive environment?

Strategic analysis

Which of the following describe the set of businesses that follow similar strategies in the same industry?

Strategic groups

Garden Tools, Inc. (GTI) offers customers its product or service at a lower price than its rivals can. GTI can be described as utilizing which of the following strategy?

Cost-leadership strategy

Interest rates and exchange rates are part of which element of PESTEL?

Economic

Which of the following is NOT a force in Porter's industry analysis model?

Employee Power

Which of the following describe the systematic and intentional analysis of both a firm's internal state and its external, competitive environment?

Environmental scanning

______ factors are things in the global environment that may impact a firm's operations or success, examples are a rise in interest rates, or a natural disaster.

External

A firm's resources and capacities are the unique skills and assets it possesses.

True

A firm's strategic position should try to be unique in some way that competitors cannot imitate quickly or easily

True

A firm's weaknesses are simply gaps in capabilities, and those gaps do not always have to be filled within the firm.

True

Demographics includes facts about income, education levels, age groups, and the ethnic and racial composition of a population.

True

To achieve a competitive advantage over rivals in the industry, the successful cost leader tightly controls costs throughout its value chain activities.

True

To react to change more easily and develop products consumers want, managers and consultants engage in environmental scanning.

True

A firm's ______ environment includes components inside the firm and outside the firm.

competitive

ABC Products is described as having a _______ when it successfully attracts more customers, earns more profit, or returns more value to its shareholders than rival firms do.

competitive advantage

From a value chain perspective, _____ are the actions a firm takes to directly provide a product or service to customers, whereas, ______ are actions required to sustain the firm that are not directly part of product or service creation.

primary activities; support activities

While ________ are things a firm has to work with, such as equipment, facilities, raw materials, employees, and cash, _____ are things a firm can do, such as deliver good customer service or develop innovative products to create value.

resources; capabilities

"S" in the SWOT analysis stands for ______.

strengths

ABC Products is good at marketing its sports products. This describes ABC's

strengths.

In the context of Porter's model, a(n) ____ is any other product or service that can satisfy the same need for a customer as an industry's offerings.

substitute

A firm's _____ is the progression of activities it undertakes to create a product or service that consumers will pay for.

value chain

"W" in the SWOT analysis stands for ______.

weaknesses