chapter 3

Increasing globalization, changes in long-term industry growth rates, market and product innovation, as well as changes in societal concerns, attitudes, and lifestyles are all categories of

Driving forces

The power of the buyers is high when

Each buyer purchases large quantities relative to the size of a single industry member.

______________ industries tend to be more profitable than ____________________ ones

Fragmented, consolidated

Exit barriers are obstacles that determine how easily a firm can leave the industry. When exit barriers are high, what happens to industry attractiveness?

It decreases.

The environmental analysis that looks at the natural environment plus aspects of the societal environment is called the ___________________

PESTEL analysis

The fact that the number of Americans who classify as Middle Class is declining represents a(n) _____________ factor in the PESTEL

Sociocultural

Suppliers are powerful when which of the following happens?

They offer a credible threat of forward integration

With a limited marketing budget, I need to know which of my industry rivals I most need to concentrate my negative advertising on. Generally, this will be the one(s) trying to get the same customers I'm trying to get, and in pretty much the same way. One tool that I can use to make this determination would be

a strategic group map

A high level of competition (rivalry) within an industry can be viewed as

all of the above

Macro-environmental PESTEL analysis considers the effects of forces on ___________

an entire industry

Competitive rivalry is the strongest between firms that __________________

are in the same strategic group

Labor unions were formed specifically to increase the ________________

bargaining power of suppliers

If I want to determine which products/services would be considered substitutes for the product/service offered by a particular company, I should best consult its

business model

If Wal-Mart were to decide to enter the automobile distributor (dealership) business, this would represent a monumental shift in that industry and over time would fundamentally change its competitive landscape. Wal-Mart's entry into this market would represent a ____________________ originating from the ________________ environment for the automobile distributor's industry

driving force, competitive

Currency exchange rates would be considered part of the macro environment's _____________ factors

economic

Rivalry based on price competition can be devastating for the industry while leading to only positive results for its customers

false

Congress passed the Clean Air Act in response to the public's newfound environmental concerns and outrage over what it (the public) perceived to be unrestrained corporate pollution. In response, several industries such as utilities and automobile manufacturers have had to make dramatic changes in the technology used in the creation and operation of their products. These industries are responding to a change in the ________________ environment that was brought about by changes in the ________________ environment

legal, sociocultural

Rivalry among competitors is likely to be strongest when the industry is in the ____________ stage of its lifecycle

mature

The pharmaceuticals lobby has been quite effective in helping to shape the opioid debate that's been raging in Washington for the last couple of years. As such, they would be considered a ____________ force for the healthcare industry.

political

The Tax Cuts and Jobs Act (TCJA) passed by Congress and signed by former President Trump in 2018 represents a(n) _______________________ for a business seeking to understand their business environment

political force

The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand its business environment

sociocultural force

A firm's external environment includes all but

the company, itself

Having economies of scale as a key success factor in an industry usually represents __________

A barrier to entry for a small start-up hoping to break into the industry