BCOR 460 Chapter 3 Learnsmart

Which of the following are examples of commonly encountered capital requirements?

- paying for start-up losses - managing a production process - setting up production facilities

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

- product and service offerings - expenditures on research and development - cost structure

Which of the following statements is likely to be true about a fragmented industry?

It consists of small firms.

The threat of entry is high when capital requirements are ______ in comparison to the expected returns.

Low

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

an industry analysis

Obstacles that determine how easily a firm can enter an industry, are called ______.

entry barriers

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

government bodies

Which term describes an increase in the overall price level?

inflation

Exit barriers, strategic commitments, and competitive industry structure are important factors in determining the ______.

intensity of rivalry

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

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

natural monopolies

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

of potential competitors entering the industry

Which factors result from the processes and actions of government bodies that influence the decisions and behavior of firms?

political

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

real estate

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

rivalry

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

scale

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

When a person that has been using a PC with a Microsoft Windows operating system starts using an Apple computer (which has a different operating system), that person will incur significant customer ______.

switching costs

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

Governments sometimes set up a natural monopoly when a venture ______.

would otherwise not be profitable

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

Regulatory changes tend to affect entire industries at once.

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

economic

The overall ______ is a measure of the change in the amount of goods and services produced by a nation's economy.

economic growth rate

The ______ the forces, the ______ the expected competitive intensity, which in turn limits the industry's profit potential.

stronger; stronger

When suppliers can demand higher prices for their inputs or reduce the quality of the input factor delivered, they demonstrate that they are Blank______.

powerful

Which of the following are the four main competitive industry structures?

- monopolistic competition - oligopoly - monopoly - perfect competition

Which of the following are characteristics of a monopolistically competitive industry?

- obstacles to entry - a differentiated product - the ability to raise prices for unique product

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

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

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

bargaining power of suppliers

The power of ______ is the pressure they can put on the margins of producers in the industry by demanding a lower price or higher product quality.

buyers

Which of the following are important factors in determining the intensity of rivalry among existing competitors?

- Exit barriers - Competitive industry structure - Industry growth

Which of the following are examples of economies of scale?

- Having more negotiating power vis-à-vis suppliers - Spreading fixed costs over more units

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.

Which of the following are examples of sociocultural factors?

- growth of the Hispanic population - increased number of health-conscious consumers

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

- growth rates - interest rates - price stability

What are the three aspects of mapping strategic groups?

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

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

a function of five forces related to competition

In a perfectly competitive industry, firms have difficulty ______.

achieving competitive advantage

Advantages based on brand loyalty, proprietary technology, preferential access to raw materials, and favorable geographic locations are examples of ______.

advantages independent of size

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

What term describes the positive effect that one user of a product or service has on the value of that product or service for other users?

network effect

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. What is this an example of?

network effects

What is true about the external forces called technological factors?

They capture the application of knowledge to create new process and products.

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

True