chapter 2
a
The _____ environment is the set of factors that directly influences a firm and its competitive actions and responses within the industry. a. industry b. internal c. competitor d. political/legal
d
The country's largest landscape company is the result of a merger between two multistate firms, Brickman Group and ValleyCrest. Now called BrightView, the $2 billion firm was created in 2015. The company is operating in a fragmented industry dominated by small, local businesses. Which of the following identifies a relevant competitive force and a way the company might leverage it? a. Bargaining Power of Suppliers: BrightView will have difficulty leaving the landscape industry because of its investment in this merger and the cost of all of the landscape equipment included among both companies' assets. b. Complementors: BrightView will need to collaborate with other companies to develop outdoor products because there are not enough complementary products in the marketplace to make homeowners value their landscaping. c. Bargaining Power of Buyers: BrightView can expect customers to purchase from it because of brand loyalty. d. Threat of New Entrants: BrightView may be able to lessen the impact of this force in a low-barrier industry through economies of scale, specifically discounts on bulk purchases of raw material inputs.
c
The craft beer industry is becoming a dominate force in the industry, leading to a decline in sales of larger domestic beers. This turn of events is a direct result of the: a. general environment. b. competitor analysis. c. industry environment. d. competitor environment.
industry envrionment
While performing the external environmental analysis, your scanning leads you to some significant insights. The two insights are of separate environments: the general environment and the industry environment. The general environment insights have significant impact on the sociocultural and technological segments that are affecting the United States as a whole. The industry environment insights are actionable because AMC will be much more likely to have resources and expertise to cause change. The industry insights detail the opportunities and threats that are affecting the movie exhibition business. Which environment should AMC try to manipulate?
d
An industrial tool manufacturer relies on a particular distributor network. This distributor network has the largest online outlet and store network, and its product lines are aimed at construction workers. The distributor network is seeking a manufacturer to provide it with private-label products, as it has decided to offer only its own product line in this category of industrial tools. Now, the industrial tool company must decide whether to agree to this proposition or lose this network as a customer. This is an example of which of the competitive forces at play in this industry? a. Industry competitive structure b. Rivalry among competing firms c. Bargaining power of suppliers d. Bargaining power of buyers
b
As an industry environment evolves over time, the: a. strategic groups become less attractive to new entrants. b. strength of the competitive forces in the industry change. c. number of companies is reduced, and the environment becomes more consolidated. d. industry becomes more profitable.
b
As discussed in the video, the craft beer industry has been able to capture 11% of overall beer sales, while occupying only 6% of the market. This financial review of the external environment is which step in the environmental analysis process? a. Scanning b. Monitoring c. Forecasting d. Assessing
a
In 2011, Apple and Samsung were in a legal battle over patenting. Apple and Samsung mutually accused each other of infringing on intellectual property, and each took action legally. Why would both parties want to spend the time and resources to reclaim their intellectual property? a. To neutralize a threat that could hinder strategic competitiveness b. To receive compensation, as both companies were struggling financially c. To distract the competition and hopefully gain a competitive edge in the meantime d. To ruin the reputation of the other company
b
Potential competitors may enter an industry and begin to take market share from existing companies. Which of the following is one of the largest challenges a new entrant needs to overcome to be successful when entering an industry? a. There may be a lack of products that go along with the product. b. Production costs are high and require high volumes to achieve profitability. c. Several powerful retailers provide the only access to customers. d. Very few customers are currently buying a product.
scanning
The movie cinematic industry is not what it once was. Back in the 1940s, a trip out to the theater was a common occurrence. The typical American saw 28 films a year in the theater. Now, that number has dropped dramatically to four. It is your duty to help turn the movie industry around and return it to the popularity it once was. You have been hired as a consultant for one of the largest movie theater circuits, AMC. You have been charged with developing a plan that will help AMC's efforts to help revitalize the industry. Your first order of business is to become familiar with the industry and start by identifying early signals of environmental changes and trends. To perform an external analysis of this industry, what is your first step?
b
The notion of a strategic group can be used for diagnosing a firm's competition, positioning and profitability in the industry. What is the plan at Port City Brews to stay ahead in their strategic group? a. To lower their prices b. To emphasize quality over quantity c. To emphasize quantity over quality d. To distribute their product to more retail chains
b
The term "white space" has become a very popular term over the last few years. This term describes a space in the competitive landscape that competitors are not occupying. Pricing, quality, and distribution channels are examples of what may be plotted along strategic dimensions to determine points of parity and points of difference. As a company, do you want to be in the "white space"? a. No, as the void in that space most likely is due to a disadvantage b. Possibly, as the "white space" could be a place that is competitive but has been neglected or could also be a space that is not competitive or profitable c. Yes, as you will be easily identifiable from the competition as having vastly different capabilities d. No, as you will not be associated with the competition
compete with the substitutes
There are two threats that have presented themselves. One is the threat of substitution. The target market of 14- to 24-year-old viewers prefers to stream their entertainment at home. They see that there is an enormous selection of movies that they have never seen, and that watching an old or poorly-made movie at home is more attractive than the hassle and cost of going out to the theater. The other threat is the threat of new entrants into the theater segment. While the intelligence is unclear, rumors have it that this could bring new life to movie exhibitions. Which option should you choose?
c
Through research and development (R&D), a cable company has found a way to use its existing network lines to serve customers with a new product offering—home security systems. The company is offering the service with a lower monthly fee than most other security companies. However, the sales force didn't see a lot of interest among its customers who had an existing security system from a competitor until they ran a promotion for reduced prices on equipment and free installation. Which of the competitive forces is at play? a. Cost conditions b. Bargaining power of suppliers c. Customer switching costs d. Complementors
b
What is the term that is concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution? a. Economic segment b. Demographic segment c. Political/legal segment d. Sociocultural segment
d
A company is debating whether to enter a new industry. The first order of business is to conduct an analysis of the five forces. Why is this a crucial first step in the decision-making process of entering a new market or industry? a. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely succeed. b. If the barrier for entry is high, and suppliers and buyers have strong bargaining positions, the venture will most likely succeed. c. If the barrier for entry is high, and suppliers and buyers have little bargaining power, the venture will most likely fail. d. If the barrier for entry is low, and suppliers and buyers have strong bargaining positions, the venture will most likely fail. Hide Feed
d
Car manufacturers have a large lead time on new products. If an idea for a feature on a vehicle is developed, it will likely be two years before consumers know about it and can decide if they want to buy it. Consumer trends are sometimes short lived as they are always evolving. Which external environmental analysis element is a primary focus of car manufacturers? a. Forecasting b. Scanning c. Monitoring d. Assessing
b
Check My Work A telecommunications company is impacted by government regulations of the wireless spectrum, cell tower locations, and Internet accessibility. The company decides to hire a lobbying firm to represent its interests with the U.S. government, specifically the FCC, FTC, and Congress. This is an example of a company managing _____ forces in the macroenvironment. a. technological b. political/legal c. social d. global
c
Check My Work General Electric (GE), the multinational conglomerate, is researching rivals in the appliance industry by analyzing the financials, current product offerings, and strategies of competitors in order to gain insight as to how to gain a competitive advantage. Which of the following is GE performing? a. General analysis b. Industry analysis c. Competitor analysis d. External environmental analysis
d
Cisco is a technology company looking to diversify its portfolio and compete in a new market. After conducting a scan and forecast, the consultants hired by Cisco provide several options. In which of the following economic segments should Cisco seek to compete? a. A stable economy with a declining growth potential b. An unstable, new economy that has an attractively high growth potential c. A very stable economy with low growth potential d. A relatively stable economy with strong growth potential
b
Consider the competitive force of risk of entry by potential competitors. Large brewers, such as Anheuser-Busch InBev, benefit from which of the following? a. Customer switching costs b. Economies of scale c. Lack of substitute products d. Government regulations
b
In an effort to gain better control of the market, the video mentioned a possible $20 billion merger between Anheuser-Busch and the brewer of the popular Mexican beer Corona. This would be an example of a force within the political/legal segment. Why is the U.S. Justice Department trying to stop the deal? a. The deal could automatically shut down craft beer breweries to make space for the merging breweries. b. The deal could result in less competition by limiting smaller brewers' access to the market. c. The deal could lead to lower prices and more products. d. The deal could lead to smaller breweries being bought out by their larger competitors.
b
In an external environmental analysis, there are two important elements that need to be identified. What are those two elements? a. Strengths and weaknesses b. Opportunities and threats c. Threats and strengths d. Opportunities and weaknesses
b
In the toy industry, Mattel is one of the world leaders, especially with their line of Barbie dolls. However, it has faced competition from MGA Entertainment, who has produced Bratz dolls since the 1990s. Which of the following statements is true about the strategic group in which these companies compete? a. The two companies occupy different strategic groups and will likely have very different competitive forces and different strategies. b. By competing in the same strategic group, the two companies are dealing with customers who view their products as direct substitutes for each other. c. Since they are both toy companies, they both have the ability to quickly pursue the toy truck market with minimal investment. d. The companies are dealing with the same competitive forces as all of the other companies in the toy industry.
d
Many large corporations have a presence in Washington D.C. in the form of lobbyists. These individuals attempt to have their voice, and the voice of the company they represent, heard. If there is a potential advantage to be had due to new legislation or implementation/abolition of laws and rules, it is the lobbyists' duty to ensure it is in their company's favor. Which of the following segments is this process referring to? a. Economic segment b. Governmental segment c. Sociocultural segment d. Political/legal segment
a
Procter & Gamble (P&G) is a consumer products company that is consistently implementing scanning systems of the environment. They want to identify early signals of environmental changes and trends. P&G's competitors also frequently utilize scanning systems but are not as competitive as P&G. Which of the following could be the reason for P&G's competitiveness? a. P&G's ability to take action on ambiguous, incomplete, or unconnected data b. P&G's reports are more robust and contain insider information c. The competitors are not as educated as P&G's executives d. The competitors are less concerned with competitive advantages
a
Strategic groups exist because: a. companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators, and affects their strategies. b. government regulators have different rules for companies based on the size of the company, geographic headquarters, and number of employees. c. industries are one-dimensional, and all businesses within an industry utilize the same resources and same strategies to achieve their goals. d. customers want variety in the products and services they select, and different brands can serve customers' needs differently.
c
Suppliers are most powerful when a company: a. has multiple suppliers to choose from that produce similar components at similar quality. b. has the capability of producing the end product without the supplier. c. would have switching costs if it went to a different supplier because the current supplier's products are unique. d. buys from a supplier in large quantities, making up 50 percent or more of the supplier's total sales.
b
The executive leadership team of a large corporation is analyzing a report. The report's contents have information that can be used to better understand and anticipate a competitor's objectives, strategies, assumptions, and capabilities. Which of the following is the term for the report being analyzed? a. Internal analysis b. Competitor intelligence c. External environmental analysis d. SWOT analysis
b
The five competitive forces include all of the following forces that shape competition within an industry EXCEPT: a. bargaining power of suppliers. b. rate of innovation and change. c. threat of new entrants. d. threat of substitute products.
a
What are the possible repercussions of a company that performs unethically in order to receive competitive intelligence to gain an advantage? a. Possible jail time or fines, but not always b. Significant prison sentences c. No threat, as unethical actions will be kept secret d. No threat of legal action, as unethical actions are not necessarily illegal
d
What is a competitor analysis? a. An internal report of what a competitor may discover if the competitor analyzed the company b. A robust analysis of one specific competitor c. A SWOT report of a competitor d. An analysis of companies with which a firm competes directly
c
What is a set of competitive firms emphasizing similar strategic dimensions and using a similar strategy? a. Business partners b. Complementors c. Strategic group d. Collusion group
c
What is the most likely outcome for a company if the executives never analyze a competitor's possible reaction to competitive actions the firm takes? a. The company will still succeed if it has effective marketing. b. The company will still succeed as long as it has an efficient corporate structure. c. The company will most likely fail because the competitor might neutralize its competitive advantage. d. The company will most likely fail due to unlawful actions that it was unaware of.
a
When Bill Butcher of Port City Brews discusses shelf space and the way that a merger could increase the leverage of potential large brewers, he is discussing which competitive force? a. Bargaining Power of Buyers b. Rivalry Among Established Companies c. Complementors d. Substitute Products
a
Which of the following describes the relationship between Apple, the leading cell phone manufacturer and applications provider, and King, the developers behind the Candy Crush Saga app? a. Apple and King are complementors. b. Apple is a customer of King. c. Apple and King are competitors. d. King is a supplier to Apple.
a
Which of the following is NOT a concern of a competitor analysis? a. Data on what the competitor's available funds are for innovation, as shown by its balance sheet b. Information about what drives the competitor, as shown by its future objectives c. Information about what the competitor is doing and can do, as revealed by its current strategy d. Intelligence about what the competitor believes about the industry, as shown by its assumptions
d
Which of the following would be deemed unethical when developing competitor intelligence? a. Analyzing competitors' financial reports b. Attending trade shows solely to obtain knowledge of competitors' new products c. Obtaining court records in an attempt to find statements that may not be found anywhere else d. All of these actions are ethical
neutralize the threat
While performing the industry analysis, your scanning led you to some significant insights. The two insights are the recognition of a possible threat and a possible opportunity. If you choose the route to neutralize the threat, you could slingshot the industry for improvement. If you choose to exploit the opportunity, you will be taking a high risk and the results may be beneficial for AMC, but not the industry as a whole. Which action is most valuable to revitalizing the movie exhibition industry as a whole?
a
You are hired as a strategic analyst for a Fortune 500 company. Your first task is to develop a competitive intelligence report to find key insights on the rivals' latest actions, current capabilities, and potential future actions. Being new to this type of report and the ethical protocols, what should be your first action? a. Contact the Strategy and Competitive Intelligence Professionals association. b. Analyze the publicly released financial records from six months ago. c. Infiltrate the competitors' headquarters and plant devices to receive information. d. Call the competitors' CEO for an interview.
