MGT 4960 Exam 1 Chapter 3

Exit barriers are obstacles that determine how easily a firm can leave the industry. When exit barriers are high, what happens to industry attractiveness? a. It decreases. b. It increases. c. It becomes a complement. d. It decreases as profitability increases. e. It has no impact.

a. It decreases.

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. a strategic group map b. SWOT c. an SFAS d. a Five forces analysis e. STEEP analysis

a. a strategic group map

Competitive rivalry is the strongest between firms that _________________________. a. are in the same strategic group b. are in the same industry c. are located in the same geographic area d. share the same available compliments e. share the same bank

a. are in the same strategic group

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. a. political b. legal c. sociocultural d. technological e. economic

a. political

A firm's external environment includes all but: a. the company, itself b. political factors c. its industry d. its strategic group e. it includes all of these

a. the company, itself

The power of the buyers is high when: a. There are many buyers. b. Each buyer purchases large quantities relative to the size of a single industry member. c. Buyers face large switching costs. d. The industry's products are differentiated. e. Buyers cannot credibly threaten backward integration.

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

Rivalry based on price competition can be devastating for the industry while leading to only positive results for its customers. a. True b. False

b. False

____________ define(s) what a company needs to have, be, or be good at in order to be competitive in a given industry. a. The five forces b. Key success factors c. A company's mission d. Strategic vision e. The business model

b. Key success factors

The environmental analysis that looks at the natural environment plus aspects of the societal environment is called the _____________________. a. Five forces analysis b. PESTEL analysis c. Opportunity analysis d. STEP analysis e. Competitive analysis

b. PESTEL analysis

Labor unions were formed specifically to increase the ____________________. a. bargaining power of buyers b. bargaining power of suppliers c. rivalry among competitors d. the barriers to entry for potential new entrants e. threat of substitutes

b. bargaining power of suppliers

Currency exchange rates would be considered part of the macro environment's _____________ factors: a. political b. economic c. industrial d. social e. global

b. economic

Rivalry among competitors is likely to be strongest when the industry is in the ____________ stage of its lifecycle. a. introduction b. growth c. mature d. declining e. stage makes no difference

b. growth

Having economies of scale as a key success factor in an industry usually represents _____________. a. An opportunity for a small start-up hoping to break into the industry b. An economy of scope c. A barrier to entry for a small start-up hoping to break into the industry d. An exit barrier for a small start-up hoping to break into the industry e. An irrelevant factor for a small start-up hoping to break into the industry

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

The fact that the number of Americans who classify as Middle Class is declining represents a(n) _____________ factor in the PESTEL. a. Political b. Economic c. Sociocultural d. Technological e. Ecological

c. Sociocultural

Suppliers are powerful when which of the following happens? a. Satisfactory substitutes are available. b. They sell a commodity. c. They offer a credible threat of forward integration. d. They are part of a highly fragmented industry. e. None of the above

c. They offer a credible threat of forward integration.

Macro-environmental PESTEL analysis considers the effects of forces on ____________. a. a single firm b. industry leaders c. an entire industry d. a strategic group e. a strategic business unit

c. an entire industry

The recently passed Tax Cuts and Jobs Act (TCJA) represents a(n) _______________________ for a business seeking to understand their business environment. a. ecological force b. legal force c. political force d. sociocultural force e. economic force

c. political force

An appropriate substitute for a Coke would be _____________. a. a Pepsi b. a Sam's Cola c. a generic cola brand d. a candy bar e. There is NO substitute for Coke!

d. a candy bar

If I want to determine which products/services would be considered substitutes for the product/service offered by a particular company, I would best consults its: a. vision statement b. mission statement c. objectives d. business model e. policies

d. business model

If Wal-Mart were to decide to enter the automobile distributor 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. a. key success factor, internal b. driving force, societal c. key success factor, competitive d. driving force, competitive e. key success factor, natural

d. driving force, competitive

The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand its business environment. a. ecological force b. political-legal force c. key success factor d. sociocultural force e. economic force

d. sociocultural force

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: a. Key success factors b. Industry attractiveness c. Substitute products d. Industry inflection points e. Driving forces

e. Driving forces

A high level of competition (rivalry) within an industry can be viewed as: a. a barrier to entry b. a sign that the industry is in the mature stage c. a negative in assessing the attractiveness of the industry d. a relatively expensive way of conducting business for industry participants e. all of the above

e. all of the above

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, a number of 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. a. technological, legal b. technological, sociocultural c. political, technological d. Sociocultural, political e. legal, sociocultural

e. legal, sociocultural