CBA 469 Chapter 3 SB

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

A rise in economic growth is reflected by ______.

businesses expanding operations to satisfy demand

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

Production costs can increase when ______.

buyers demand higher quality and more service

What are the three aspects of mapping strategic groups?

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

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

entry barriers

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

expenditures on research and development product and service offerings cost structure

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

research and development customer service distribution channels market segments

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

1. PESTEL analysis 2. Porter's five forces 3. strategic group mapping

An industry analysis provides which of the following?

A rigorous way of identifying the industry's profit potential, Insight into a firm's strategic position within an industry, & The level of profitability that can be expected for the average firm in the industry

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 statements is likely to be true about a fragmented industry?

It consists of small firms.

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.

Which of the following reduces profit margins for air carriers?

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

Which of the following statements about industry dynamics is true?

Over time, industry structures are not stable. The five forces model is a static model.

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

Reconfiguring value chains Leverage existing assets Establishing a niche

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

Regulatory changes tend to affect entire industries at once.

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

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

a differentiated product the ability to raise prices for differentiated products obstacles to entry

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

a function of five forces related to competition

When a firm in an oligopoly cuts prices, ______.

a price war is likely to result

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

an industry

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

bargaining power of suppliers

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

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

ecological

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

economic growth rate

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

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

intensity of rivalry

Which of the following is an example of a recent innovation in process technology?

lean manufacturing Reason: This is a product innovation instead of process innovation.

Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of ______ factors influencing business.

legal

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

limits to the industry's profit potential

A perfectly competitive industry has ______ entry barriers and ______ small firms.

low; many

In the airline industry, the ______ involved in 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

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

powerful

Which of the following contribute to consumer buying power?

real time, accurate price comparisons low 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

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

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

economic

Which of the following are examples of sociocultural factors? - extended period of low-interest rates -method of raising income -growth of the Hispanic population -increased number of health-conscious consumers

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

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

less

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

scale

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

Which of the following are important sources of entry barriers?

credible threat of retaliation, network effects, economies of scale, capital requirements, and government policy.

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

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

monopolistic competition monopoly perfect competition oligopoly

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

Competitive industry structure, Industry growth, and Exit barriers

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

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

strategic

There is a(n) ______ relationship between competitive intensity and the power of the five forces.

strong

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

stronger; stronger

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

substitutes

In an oligopoly, which of the following conditions exist?

high barriers to entry a few large firms differentiated products

A key feature of an oligopoly is that the competing firms in the industry ______, meaning the actions of any one firm will influence the behaviors of the other firms.

are interdependent

Which of the following help determine competitive industry structure?

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

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

interdependent

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

Which of the following statements about Airbnb is correct?

it handles more accommodations than the three biggest hotel chains combined.

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

Individual firms have little or no ability to raise prices. Firms in the industry sell a commodity product. The industry is fragmented.

When a new firm enters an industry, which of the following often occur?

Industry profit potential declines, Incumbent firms lower prices, & Incumbent firms spend more to satisfy customers.

Which of the following are examples of economic factors in the firms general environment?

interest rates, growth rates, and price stability

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

suppliers, the threat of substitutes, & buyers