Chapter 3 pt2

The aging of the population, changes in ethnic composition, and effects of the baby boom are

demographic changes.

The final step in industry analysis is to

draw a strategic-group map.

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.

Earlier, the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets, and hotels for their customers. 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.

What is the rule of thumb behind Porter's five forces model?

The weaker the five forces, the greater the industry's profit potential—making the industry more attractive.

A fragmented industry is made into a consolidated industry through

horizontal mergers and acquisitions