Wk 1 - Practice: Ch. 3, External Analysis

Which of the following are examples of sociocultural factors?

A growing number of U.S. consumers have become more health-conscious about what they eat. The growth of the Hispanic population.

Many drivers find a GPS navigation system useful. Because installing a GPS system in an automobile adds value to the vehicle, the system functions as_____?

a complement

According to Michael Porter, the profit potential of an industry is ______.

a function of five forces related to competition

Global warming would be an example of ___ factor in a firm's external environment.

an ecological

The most rigorous means of analyzing the profit potential within a specific industry is to conduct ______.

an industry analysis

A ______ is a product or service that adds value to the original product offering.

complement

Firms have a tendency to change the industry structure in their favor, making it more __ through horizontal mergers and acquisitions, since this tends to be more profitable than a fragmented one.

consolidated

___________factors result from the processes and actions of government bodies that influence the decisions and behavior of firms.

Political

Which of the following are characteristics of the companies in a strategic group?

The companies form part of a specific industry The companies pursue similar strategies. The companies differ in important dimensions from companies in other strategic groups.

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

They can force the cost of production to increase. They can reduce the industry's profit potential.

Sociocultural factors are constantly in flux and also differ across groups.

True

Which of the following are essential questions that strategic leaders need to consider to increase the probability of entering an industry successfully?

When to enter? What type of entry should be made? Who are the players? How to enter?

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

government bodies

The relationship between the natural environment and business organizations can best be described as ______.

interdependent

The economic factors that affect a firm's external environment are ______

largely macroeconomic

Managers have ______ direct influence over external forces in the firm's general environment than those in the firm's task environment.

less

Which of the following contribute to consumer buying power?

low switching costs real time, accurate price comparisons

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

mandates laws regulations

Along which of the following dimensions do strategic groups differ from one another?

market segments distribution channels research and development customer service

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

mobility barrier

Industry-specific factors known as ______ separate one strategic group from another.

mobility barriers

In the five forces model, threat of entry refers to the risk:

of potential competitors entering the industry.

Although the five forces model is useful in understanding an industry's profit potential, it provides only a ___.

point-in-time snapshot of a moving target

The intensity with which companies in an industry jockey for market share and profitability is known as ___.

rivalry

The threat of ______ is one of the five forces and can be exemplified by the threat that videoconferencing presents to business travel.

substitutes

The pressure of rivalry increases when which of the following forces increase in intensity?

the threat of entry the threat of substitutes the power of buyers and suppliers

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

threat of entry

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

threat of substitutes

The external forces called technological factors ______

capture the application of knowledge to create new process and products

Michael Porter developed the five forces model to help firms do which of the following?

determine the profit potential of different industries gain and sustain a competitive advantage

Growth rates, interest rates, and levels of employment would be considered ______ factors in a firm's general environment.

economic

Place the three frameworks used in industry analysis in the order they should be used, with the first at the top.

1) PESTAL Analysis 2) Porter's five forces 3) Strategic group mapping

Which of the following innovative ideas helped Airbnb develop a successful business in the peer-to-peer rental space?

Ensuring a smooth transaction between hosts and guests Presenting a well-designed website Fortuitous timing that led to growing demand

Which of the following are approaches for answering the question "How to enter?" when a firm is considering entering an industry?

Establishing a niche Reconfiguring value chains Leverage existing assets

Which of the following statements about legal factors as an external force is true?

Regulatory changes tend to affect entire industries at once.

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

an industry

Which of the following are important strategic dimensions in mapping strategic groups?

expenditures on research and development product and service offerings cost structure

When managers understand the forces in the external environment, they are better able to ______.

mitigate threats and leverage opportunities

Which of the following statements about Airbnb is correct?

It handles more accommodations than the three biggest hotel chains combined

Which of the following reduces profit margins for air carriers?

Large corporate customers contracting with the U.S. airline industry

The pressures that industry suppliers can exert on an industry's profit potential, is also called the ______.

bargaining power of suppliers

Production costs can increase when ______.

buyers demand higher quality and more service

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

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

What are the three aspects of mapping strategic groups?

graphing the firms in the strategic group and indicating each firm's market share identifying the most important strategic dimensions choosing two key dimensions for the horizontal and vertical axes

An example of a recent innovation in process technology is ______.

lean manufacturing

In addition to the static nature of the PESTEL, Porter's five forces, and strategic group mapping frameworks, what is their other shortcoming?

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