BCOR 460 chapter 3

The pace of technological change seems to be_______

Increasing

The closer firms are on the strategic group map, the more ___ they are competing with

Intensely & directly

Deflation is a serious threat to economic growth for which of the following reasons?

It distorts expectations about the future and it stops companies from investing in new production capacity because they expect a further decline in prices

In addition to the static nature of the strategic group model, what is its other shortcoming?

It does not help us understand why there are performance differences among firms in the same strategic group

Which of the following statements about Airbnb is correct

It handles more accommodations than the three biggest hotel chains combined

Consumers tend to buy homes, automobiles, and computers when interest rates are ___ because credit is inexpensive.

LOW

Recessions are less likely to harm ____________ - cost airlines, which appeal more to budget conscious travelers than legacy carriers.

Low

In the airline industry, the ___ barrier of offering international routes restricts movement between hub-and-spoke and point-to-point airlines.

Mobility barrier

Which of the following are ways in which the power of buyers affects producers?

by demanding higher quality -by requesting more service -by obtaining price discounts

A company is a complementor to your company if

customers value your product more when they can use it with the other company's product

Although ________ coordination such as price fixing is illegal in the United States, _________ coordination such as "an unspoken understanding" is not.

explicit; tacit

In the PESTEL model, political factors are those that relate to _______.

government bodies

Which of the following are examples of economic factors in the firm's general environment?

growth rates -interests rates -price stability

In order to influence changes in their political environment, firms pursue __________.

nonmarket strategies

which of the following help determine competitive industry structure?

size and number of competitors -height of entry barriers -firms' degree of pricing power

A(n) ______ group is a set of companies within a specific industry that seek to achieve competitive advantage in similar ways.

strategic

Which of the following are likely outcomes of a competitive rivalry based entirely on price cutting

firms struggle to make profits -investment from firms drop off -most or all value is transferred to customers.

In an oligopoly, which of the following conditions exist?

high barriers to entry -differentiated products -a few large firms

To determine economic value, one must subtract the cost of production from the

value of a firm's product or service.

There is a ________ relationship between competitive intensity and the power of buyers and suppliers (positive)

Strong

The threat of entry is high when restrictive government policies do not exist or when industries become deregulated. T or F

T

Which of the following have helped increase the rate of convergence in the media industries?

Telecommunications advance -digital media -improved IT

As utility companies tend to serve a whole market exclusively, they are known as a ___ because the governments involved believe that the product or service would not be supplied otherwise.

Natural monopoly

the online auction site EBAy has more than 100 million active users, so buyers are more likely to find what they are looking for while sellers are more likely to find buyers for the items they are offering. This is an example of

Network effects

Rivalry among existing competitors has _________ with the height of the industry's exit barriers

A direct relationship

Which of the following are important sources of entry barriers?

-credible threat of retaliation -network effects -capital requirements -economies of scale -government policy

A group of companies that deal with more or less the same set of suppliers and buyers make up:

An industry

when a buyer moves upstream in the industry value chain into the seller's business is called

Backwards integration

Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry, while at the same time Samsung and Google are increasingly becoming competitive with one another. This scenario best illustrates the process of:

Co-opetition

Firms have a tendency to change the industry structure in their favor, for example by making industries more _______ through mergers and acquisitions

Consolidated

What helped Airbnb develop a successful business of peer-to-peer rental space?

Developing a smooth transaction between hosts and guests, fortuitous timing that led to growing demand, and presenting a well-designed website.

It might be a good idea to expand or upgrade a firm's human capital base during a ___ because unemployment is high and therefore human capital is abundant and wages usually ___.

Downturn:, Fall

Through use of the PESTEL model, firms are able to do which of the following?

Evaluate external trends, monitor external factors

Which of the following are advantages, independent of size, that incumbent firms possess?

Preferential access to distribution channels, proprietary technology, brand loyalty, and cumulative experience effects

The economic recession that began in 2008 in the United States was the result of unwise investment in _________

Real estate

The cost advantage that a firm obtains by increasing output, such as by spreading fixed costs over more units, are called economies of _____

Scale

Firms within the same strategic group tend to follow a _________ strategy while firms in a different strategic group follow a _________ strategy

Similar ; different

The cultures, norms and values of the society in which a firm competes are considered _________ factors

Sociocultural

Managers are able to influence which of the following types of external forces?

Strategic group composition and the structure of their industry

the risk that potential competitors will enter the industry is known as the _______.

Threat of entry

The threat of entry is high when capital requirements are low in comparison to the expected returns : True or False

True

In a perfectly competitive industry, firms have difficulty ______.

achieving competitive advantage

In general, a firm improves its strategic position by _____

increasing its competitive advantage

Which of the following tend to result from strong competitive rivalry?

limits to the industry's profit potential

Which of the following are factors in a firm's legal environment?

mandates, regulations, laws

Many firms of all sizes actively compete in the computer hardware industry, and there are no firms with a large market share. Product offerings tend to be similar but are differentiated in ways that enable some firms to raise or impact pricing. The computer hardware industry is an example of _______

monopolistic competition

An industry in which only one firm supplies the market is known as

monopoly

The fact that tax preparation software such as intuit's TurboTax is a Valid alternative for professional services offered by H&R Block and others example of

the threat of substitutes

Which of the following are ways that powerful suppliers are a threat to firms?

they can reduce the industry's profit potential -they can capture part of the economic value created by firms. -they can force the cost of production to increase

The _________ is the idea that products or services available from the outside the given industry will come close to meeting the needs of current customers

threat of substitutes

the weaker the five forces in Porter's model, the ________ the industry's profit potential

Greater

when suppliers offer products that are differentiated, the power of suppliers is ____

HIGH

When suppliers do not heavily on the industry for a large portion of their revenues, the power of suppliers is

High

changes in prices ( a lack of price stability) is a direct function of

How much money is in the economy

Exit barries, strategic commitments, and competitive industry structure are important factors in determining the intensity of ____

Intensity of rivalry

A___ occurs when a firm has accrued significant market power and is changing the industry structure in its favor

Near monopoly

Which of the following are forces in porter's Five forces model?

bargaining power of buyers -threat of new entrants -threat of substitute products or services

According to Porter's model, which of the following should be considered when analyzing a firm's competition?

buyers -suppliers -threat of substitutes

The key take away from the five forces model is that:

the stronger the forces, the lower the industry's ability to earn profits

If a business considers changing vendors, but doing so would require that business to alter product specifications, retrain employees, and/or modify existing processes, we would say the business faces significant ________

switching costs