Shared Flashcard Set

Details

Tactics
CH 3
128
Business
Undergraduate 4
05/20/2013

Additional Business Flashcards

 


 

Cards

Term

1. A company's "macro-environment" refers to

(p. 50)

A. the industry and competitive arena in which the company operates.

B. general economic conditions plus the factors driving change in the markets where a company operates.

C. all the relevant forces and factors outside a company's boundaries—general economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation, and closer to home, the industry and competitive arena in which it operates.

D. the competitive market environment that exists between a company and its competitors.

E. the dominant economic features of a company's industry.

Definition
C. all the relevant forces and factors outside a company's boundaries—general economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation, and closer to home, the industry and competitive arena in which it operates.
Term

2. Which one of the following is not part of a company's macroenvironment?

(p. 50)

A. Conditions in the economy at large

B. Population demographics and societal values and lifestyles

C. Technological factors and governmental regulations and legislation

D. The industry and competitive environment arena in which the company operates

E. The company's resource strengths, resource weaknesses, and competitive capabilities

Definition
E. The company's resource strengths, resource weaknesses, and competitive capabilities
Term

3. Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry?

A. How many companies in the industry have good track records for revenue growth and profitability?

B. What strategic moves are rivals likely to make next?

C. What are the key factors for future competitive success?

D. Does the outlook for the industry present the company with sufficiently attractive prospects for profitability?

E. What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?

Definition
A. How many companies in the industry have good track records for revenue growth and profitability?
Term

4. Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as

A. the forces driving change in the industry.

B. the dominant economic features of the industry in which the company operates.

C. the kinds of competitive forces industry members are facing and the strength of each competitive force.

D. the key factors influencing future competitive success in the industry.

E. All of these.

Definition

A. the forces driving change in the industry.

B. the dominant economic features of the industry in which the company operates.

C. the kinds of competitive forces industry members are facing and the strength of each competitive force.

D. the key factors influencing future competitive success in the industry.

E. All of these.

Term

5. Which of the following is not a factor to consider in identifying an industry's dominant economic features?

A. Market size and growth rate

B. The extent of backward integration of buyer needs and requirements

C. Whether the products or services of rival firms are becoming more or less differentiated

D. Strength of driving forces and competitive forces

E. The pace of technological change, scale economies and experience curve effects, and product innovation

Definition
D. Strength of driving forces and competitive forces
Term

6. Which of the following is not a relevant consideration in identifying an industry's dominant economic features?

A. Market size and growth rate, the geographic scope of competitive rivalry, and demand-supply conditions

B. The extent to which economies of scale and learning/experience curve effects are present

C. How many strategic groups the industry has and which ones are most profitable and least profitable

D. The number and sizes of buyers, the number of rivals, and the pace of product innovation

E. The prevalence of technological change

Definition
C. How many strategic groups the industry has and which ones are most profitable and least profitable
Term

7. The state of competition in an industry is a function of

A. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry.

B. competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products.

C. competitive pressures associated with the threat of new entrants into the marketplace.

D. competitive pressures associated with the bargaining power of suppliers and customers.

E. All of these.

Definition

A. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry.

B. competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products.

C. competitive pressures associated with the threat of new entrants into the marketplace.

D. competitive pressures associated with the bargaining power of suppliers and customers.

E. All of these.

Term

8. The nature and strength of the competitive forces that prevail in an industry is generally a joint product of

A. the pressures induced by the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

B. the threat that firms outside the industry will decide to enter the market.

C. the attempts of companies in other industries to win buyers over to their own substitute products.

D. competitive pressures stemming from the bargaining power of both suppliers and buyers.

E. All of these.

Definition

A. the pressures induced by the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

B. the threat that firms outside the industry will decide to enter the market.

C. the attempts of companies in other industries to win buyers over to their own substitute products.

D. competitive pressures stemming from the bargaining power of both suppliers and buyers.

E. All of these.

Term

9. Which of the following is not one of the five typical sources of competitive pressures?

A. The power and influence of industry driving forces

B. The bargaining power of suppliers and seller-supplier collaboration

C. The threat of new entrants into the market

D. The attempts of companies in other industries to win customers over to their own substitute products

E. The market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

Definition
A. The power and influence of industry driving forces
Term

10. The most powerful of the five competitive forces is usually

A. the competitive pressures that stem from the ready availability of attractively-priced substitute products.

B. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

C. the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates.

D. the competitive pressures associated with the potential entry of new competitors.

E. the bargaining power and leverage that large customers are able to exercise.

Definition
B. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.
Term

11. Typically, the weakest of the five competitive forces in an industry is/are:

A. the threat posed by potential new entrants.

B. the bargaining power and leverage that suppliers are able to exercise.

C. the competitive pressures that stem from the ready availability of attractively-priced substitute products.

D. the bargaining power and leverage that buyers are able to exercise.

E. None of these is typically weakest.

Definition
E. None of these is typically weakest.
Term

12. Using the five-forces model of competition to determine what competition is like in a given industry involves

A. building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits.

B. building the picture of competition in two steps: (1) determining which rival has the biggest competitive advantage and (2) assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits.

C. evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors.

D. assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures.

E. gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage.

Definition
A. building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits.
Term

13. What makes the marketplace a competitive battlefield is

A. the race of industry members to build strong defenses against the industry's driving forces.

B. the constant jockeying of industry members to strengthen their standing with buyers and win a competitive edge over rivals.

C. the ongoing race among rival sellers to have the highest quality product.

D. the ongoing efforts of industry members to introduce new and improved products/services at a faster rate than their rivals.

E. the ongoing race among rivals to achieve the fastest rate of growth in revenues and profits.

Definition
B. the constant jockeying of industry members to strengthen their standing with buyers and win a competitive edge over rivals.
Term

14. Competitive jockeying and market maneuvering among industry rivals

 A. determines whether the industry's strategic group map will be static or dynamic.

B. centers around collaborative efforts to overcome the bargaining power of powerful suppliers and powerful buyers.

C. is usually an industry's strongest driving force.

D. is usually one of the two or three weakest competitive forces because of the close familiarity that rivals have for one another's likely next moves.

E. is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another.

Definition
E. is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another.
Term

15. Which one of the following does not cause the rivalry among competing sellers to be weak?

A. High buyer switching costs

B. Rapid growth in buyer demand

C. Industry conditions that tempt rivals to use price cuts or other competitive weapons to boost unit sales

D. Low barriers to entry

E. Strongly differentiated products among rival sellers

Definition
D. Low barriers to entry
Term

16. Factors that tend to result in weak rivalry among competing sellers include

A. low buyer switching costs and low barriers to entry.

B. rapid growth in buyer demand, high buyer costs to switch brands, and so many industry rivals that any one company's actions have little impact on rivals' businesses.

C. weakly differentiated products among rival sellers.

D. rivals that are quite diverse in terms of their strategies, objectives, and countries of origin.

E. conditions where outsiders have recently acquired weak competitors and are trying to turn them into major contenders.

Definition
B. rapid growth in buyer demand, high buyer costs to switch brands, and so many industry rivals that any one company's actions have little impact on rivals' businesses.
Term

17. The rivalry among competing sellers tends to be less intense when

A. industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales.

B. buyer demand is weak and many sellers have excess capacity and/or inventory.

C. industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance.

D. rivals have diverse strategies and objectives and are located in different countries.

E. rival sellers have weakly differentiated products.

Definition
C. industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance.
Term

18. Rivalry among competing sellers is generally more intense when

A. there are relatively few industry key success factors and rivals have highly differentiated products.

B. the industry's driving forces are strong and rivals have strongly differentiated products.

C. barriers to entry are moderately high and the pool of likely entry candidates is small.

D. rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share.

E. barriers to entry are high and buyer switching costs are high.

Definition
D. rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share.
Term

19. Rivalry among competing sellers grows in intensity when

 A. rivals' products/services are sold at widely varying prices and there are only 2-4 rivals.

B. rivals have highly differentiated products and buyer demand is growing rapidly.

C. there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members.

D. the products/services of rivals are strongly differentiated and buyers have high switching costs.

E. buyer demand is growing slowly and the industry is composed of 6 to 10 competitors that are fairly equal in size and competitive capability.

Definition
E. buyer demand is growing slowly and the industry is composed of 6 to 10 competitors that are fairly equal in size and competitive capability.
Term

20. The rivalry among competing firms tends to be more intense

A. when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals.

B. when the products/services of rival sellers are strongly differentiated and buyer demand is strong.

C. when rivals are relatively content with their market position.

D. when there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members.

E. the smaller the number of firms in the industry and the more unequal their market shares.

Definition
A. when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals.
Term

21. Which of the following is not among the factors that affect whether competitive rivalry among participating firms is strong, moderate, or weak?

A. Whether the products of rival sellers are strongly or weakly differentiated

B. Whether demand for the industry's product is growing rapidly or slowly

C. The degree to which rivals are satisfied with their current market position

D. Whether industry driving forces are strong or weak

E. Whether industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales and whether one or two rivals have particularly powerful strategies

Definition
D. Whether industry driving forces are strong or weak
Term

22. Rivalry among competing sellers tends to be more intense when

A. competitors are very unequal in size and capability, such that small competitors must really scramble to even survive.

B. buyer switching costs are high and market demand is growing rapidly.

C. several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position.

D. the products of rival sellers are strongly differentiated.

E. there are fewer than 5 competitors and their products are strongly differentiated.

Definition
C. several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position.
Term

23. The competitive force of rival firms' jockeying for better market positions, higher sales and market shares, and competitive advantage

A. is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies.

B. is typically a weaker competitive force than is the threat of entry of new rivals.

C. is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive weapons to boost unit sales.

D. tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders.

E. is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buyers have moderate switching costs.

Definition
D. tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders.
Term

24. In analyzing the strength of competition among rival firms, an important consideration is

A. the potential for buyers to exercise strong bargaining power.

B. the diversity of competitors in terms of visions, strategic intents, objectives, strategies, resources and countries of origin.

C. the number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership strategies and focus strategies.

D. the extent to which some rivals have more than two competitively valuable competencies or capabilities.

E. whether the industry is characterized by a strong learning/experience curve and whether the industry is composed of many or few strategic groups.

Definition
B. the diversity of competitors in terms of visions, strategic intents, objectives, strategies, resources and countries of origin.
Term

25. In which one of the following instances is rivalry among competing sellers not more intense?

A. When certain competitors are dissatisfied with their market position and make moves to bolster their standing

B. When strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to transform their newly-acquired competitors into stronger market contenders

C. When competitors are fairly equal in size and capability

D. When the products of rivals are weakly differentiated, buyer switching costs are low, and market demand is growing slowly

E. When there are vast numbers of small rivals so the impact of any one company's actions is spread thinly across all industry members

Definition
E. When there are vast numbers of small rivals so the impact of any one company's actions is spread thinly across all industry members
Term

26. Which of the following is generally not considered as a barrier to entry?

A. Rapid market growth

B. Sizable capital requirements and an array of regulatory requirements

C. Strong buyer loyalty to existing brands

D. Sizable economies of scale in production

E. Difficulties in gaining access to technological know-how

Definition
A. Rapid market growth
Term

27. Potential entrants are more likely to be deterred from actually entering an industry when

A. incumbent firms have previously been aggressive in defending their market positions against entry.

B. incumbent firms are complacent.

C. buyers are not particularly price sensitive and the industry already contains a dozen or more rivals.

D. the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage.

E. buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

Definition
A. incumbent firms have previously been aggressive in defending their market positions against entry.
Term

28. Competitive pressures associated with the threat of entry are greater when

A. incumbent firms are unable or unwilling to strongly contest the entry of newcomers.

B. newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist.

C. entry barriers are relatively low and buyer demand for the product is growing fairly rapidly.

D. existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence.

E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry.

Definition
E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry.
Term

29. Which one of the following does not intensify the competitive pressures associated with the threat of entry?

A. When incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers

B. When industry members are struggling to earn good profits

C. When entry barriers are relatively low and buyer demand for the product is growing fairly rapidly

D. When existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence

E. When newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist

Definition
B. When industry members are struggling to earn good profits
Term

30. Which one of the following increases the competitive pressures associated with the threat of entry?

A. When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers

B. When buyers have a high degree of loyalty to the brands and product offerings of existing industry members

C. When buyer demand for the product is growing fairly slowly

D. When few outsiders have the expertise and resources to hurdle whatever entry barriers exist

E. When newcomers can expect to earn attractive profits

Definition
E. When newcomers can expect to earn attractive profits
Term

30. Which one of the following increases the competitive pressures associated with the threat of entry?

(p. 62)  

A. When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers

B. When buyers have a high degree of loyalty to the brands and product offerings of existing industry 

members

C. When buyer demand for the product is growing fairly slowly

D. When few outsiders have the expertise and resources to hurdle whatever entry barriers exist

E. When newcomers can expect to earn attractive profits

Definition
E. When newcomers can expect to earn attractive profits
Term

32. Competitive pressures stemming from the threat of entry are weaker when

A. there are fewer than 20 potential entry candidates and more than 10 firms already in the industry.

B. there are more than 3 entry barriers.

C. the industry outlook is risky or uncertain.

D. incumbent firms have little ability to leverage distributors, dealers, and/or retailers to retain their business.

E. the nature of the industry entails few scale economies.

Definition
C. the industry outlook is risky or uncertain.
Term

33. The best test of whether potential entry is a strong or weak competitive force is

A. the strength of buyer loyalty to existing brands.

B. whether the industry's driving forces make it harder or easier for new entrants to be successful.

C. whether the strategies of industry members are well-matched to the industry's key success factors.

D. whether there are any vacant spaces on the industry's strategic group map.

E. to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

Definition
E. to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.
Term

34. Which of the following is not a good example of a substitute product that triggers stronger competitive pressures?

A. A salad as a substitute for French fries

B. Wireless phones as a substitute for wired telephones

C. Coca-Cola as a substitute for Pepsi

D. Snowboards as a substitute for snow skis

E. Video-on-demand services from a cable TV company as a substitute for going to the movies

Definition
C. Coca-Cola as a substitute for Pepsi
Term

35. The competitive pressures from substitute products tend to be stronger when

A. buyers are relatively comfortable with using substitutes and the costs to buyers of switching over to the substitutes are low.

B. there are more than 10 sellers of substitute products.

C. the quality and performance of the substitutes is well above what buyers need to meet their requirements.

D. buyers have high psychic costs in severing existing brand relationships and establishing new ones.

E. demand for the industry's product is not very price sensitive.

Definition
A. buyers are relatively comfortable with using substitutes and the costs to buyers of switching over to the substitutes are low.
Term

36. Industry rivals tend to experience weak competitive pressures from substitute products when

A. the available substitute products are weakly differentiated from one another.

B. the buyers of the industry's products are few in number and they have substantial amounts of leverage with sellers.

C. rival sellers experience strong bargaining power from both suppliers and influential customers.

D. buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the performance they deliver.

E. the producers of substitute products are all pursuing strategies to strongly differentiate their products on the basis of quality and product performance.

Definition
D. buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the performance they deliver.
Term

37. Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

A. whether the profits of suppliers are relatively high or low.

B. the number of suppliers that each seller/industry member purchases from on average.

C. how aggressively rival industry members are trying to differentiate their products.

D. whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry.

E. whether the prices of the items being furnished by the suppliers are rising or falling.

Definition
D. whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry.
Term

38. The strength of competitive pressures that suppliers can exert on industry members is mainly a function of

A. whether needed inputs are in short supply or whether ample supplies are readily available from several different suppliers.

B. whether suppliers self-manufacture what they supply or source their items from other manufacturers.

C. the industry's position in the growth cycle.

D. whether technological change in the businesses of suppliers is rapid or slow.

E. whether the needs and expectations of buyers of the industry product are changing slowly or rapidly.

Definition
A. whether needed inputs are in short supply or whether ample supplies are readily available from several different suppliers.
Term

39. The bargaining leverage of suppliers is greater when

A. there are no good substitutes for the items being furnished by the suppliers and the number of suppliers is relatively small.

B. industry members incur low costs in switching their purchases from one supplier to another.

C. industry members purchase in large quantities and thus are important customers of the suppliers.

D. there is extensive seller-supplier collaboration.

E. the supplier industry is composed of a large number of relatively small suppliers.

Definition
A. there are no good substitutes for the items being furnished by the suppliers and the number of suppliers is relatively small.
Term

40. In which one of the following instances are the competitive pressures that industry members experience in their dealings with suppliers not weakened?

 A. When industry members pose a credible threat of backward integration into the business of suppliers

B. When the cost of switching from one supplier to another is low

C. When the buying firms purchase in large quantities and thus are important customers of the suppliers

D. When the item being supplied is a commodity

E. When the items purchased from suppliers are in short supply

Definition
E. When the items purchased from suppliers are in short supply
Term

41. Supplier bargaining power is weaker when

A. good substitute inputs exist or new ones emerge.

B. the cost of switching from one supplier to another is high.

C. suppliers furnish a critical part or component.

D. buying firms are looking for suppliers with good just-in-time supply capabilities.

E. a few large suppliers are the primary sources of a particular item.

Definition
A. good substitute inputs exist or new ones emerge.
Term

42. Which one of the following is not a factor that affects the strength of supplier bargaining power?

A. Whether needed inputs are in ample supply and are readily available from several different suppliers

B. Whether industry members are a strong threat to integrate backward into the business of suppliers and self-manufacture their own requirements

C. Whether industry members are struggling to make good profits because of slow-growing market demand

D. Whether the costs of industry members to switch their purchases to alternative suppliers are high or low

E. Whether the item being supplied is a commodity or is highly differentiated from supplier to supplier

Definition
C. Whether industry members are struggling to make good profits because of slow-growing market demand
Term

43. Which one of the following is not a factor in causing supplier bargaining power to be relatively strong?

A. The inputs needed from suppliers are in short supply.

B. Suppliers are a strong threat to integrate forward into the business of industry members.

C. The input being supplied is a commodity.

D. The input being supplied significantly enhances the quality or performance of the products of industry members.

E. There are only a few suppliers of the input.

Definition
C. The input being supplied is a commodity.
Term

44. When one or more industry members have unusually effective and mutually advantageous partnerships with their suppliers,

A. it is rare for such partnerships to have much competitive impact on those industry members not having such partnerships.

B. one unfortunate outcome is that it tends to give the supply partners much enhanced bargaining power in their dealings with these industry members.

C. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.

D. there is a high likelihood of such partnerships reducing competitive pressures on all industry members, provided technological change in the suppliers' business is rapid and the item being supplied is a commodity.

E. the usual result is to reduce competitive pressures on all industry members, provided the costs of the items furnished by supply chain partners amount to 50% or more of total cost.

Definition
C. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.
Term

45. Which one of the following is not a reason why industry members are often motivated to enter into collaborative partnerships with key suppliers?

A. To reduce the costs of switching suppliers

B. To speed the availability of next-generation components

C. To enhance the quality of parts and components being supplied and reduce defect rates

D. To squeeze out important cost savings for both themselves and their suppliers

E. To reduce inventory and logistics costs

Definition
A. To reduce the costs of switching suppliers
Term

46. Whether buyer-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

A. the speed with which general economic conditions and interest rates are changing.

B. the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members.

C. how many buyers purchase all of their requirements from a single seller versus how many purchase from several sellers.

D. the number of buyers versus the number of sellers.

E. whether industry members are spending more or less on advertising.

Definition
B. the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members.
Term

47. Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

A. whether most buyers possess roughly equal or varying degrees of bargaining power and leverage.

B. how many buyers are engaged in collaborative partnerships with sellers.

C. whether entry barriers are high or low and the size of the pool of likely entry candidates.

D. whether the overall quality of the items being furnished by industry members is rising or falling.

E. whether demand-supply conditions represent a buyer's market or a seller's market.

Definition
E. whether demand-supply conditions represent a buyer's market or a seller's market.
Term

48. Which of the following is not a factor that causes buyer bargaining power to be stronger?

A. Some buyers are a threat to integrate backward into the business of sellers and become an important competitor.

B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities.

C. Buyers have considerable discretion over whether and when they purchase the product.

D. Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs.

E. The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.

Definition
B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities.
Term

49. Which of the following factors does not affect whether buyer bargaining power and seller-buyer collaboration are an important source of competitive pressure in an industry?

A. Whether winning the business of certain customers, offer a seller important market exposure or prestige

B. The extent and importance of collaborative partnerships and alliances between particular sellers and buyers

C. Whether buyers pose a major threat to integrate backward into the product market of sellers

D. Whether sellers' products are weakly differentiated, making it easy and inexpensive for buyers to switch to competing brands

E. Whether buyers have a strong preference for products of superior quality or just average quality

Definition
E. Whether buyers have a strong preference for products of superior quality or just average quality
Term

50. Which of the following factors is not a relevant consideration in determining the strength of buyer bargaining power?

A. Whether winning the business of prestigious customers gives a seller important market exposure and heightens its brand name

B. Whether the seller is a manufacturer.

C. Whether buyers pose a major threat to integrate backward into the product market of sellers

D. Whether sellers' products are weakly differentiated, making it easy for buyers to switch to competing brands

E. Whether collaborative partnerships and alliances between particular sellers and buyers put rivals lacking such collaborative relationships at a competitive disadvantage

Definition
B. Whether the seller is a manufacturer.
Term

51. Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when

A. virtually all buyers have strong brand attachments and are highly brand loyal.

B. demand for the product is growing rapidly.

C. sales are made to buyer groups with either strong bargaining power or high sensitivity.

D. sellers are racing to add the latest and greatest performance features so as to attract the patronage of important or prestigious buyers.

E. buyers are very quality conscious.

Definition
C. sales are made to buyer groups with either strong bargaining power or high sensitivity.
Term

52. In which of the following circumstances are competitive pressures associated with the bargaining power of buyers not relatively strong?

A. When buyer demand is growing rapidly

B. When buyers are relatively well informed about sellers' products, prices, and costs

C. When buyers pose a major threat to integrate backward into the product market of sellers

D. When sellers' products are weakly differentiated, making it easy for buyers to switch to competing   brands

E. When buyers have considerable discretion over whether and when they purchase the product

Definition
A. When buyer demand is growing rapidly
Term

53. Competitive pressures stemming from buyer bargaining power tend to be weaker when

A. the number of buyers is small, such that each customer's business tends to be particularly important to a seller.

B. buyer demand is growing slowly or maybe even declining.

C. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.

D. buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs.

E. the buyer group consists a few large buyers and the seller group consists of numerous small firms.

Definition
C. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.
Term

54. Which of the following conditions acts to weaken buyer bargaining power?

A. When buyers are unlikely to integrate backward into the business of sellers

B. When buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs

C. When the costs incurred by buyers in switching to competing brands or to substitute products are relatively low

D. When the products of rival sellers are weakly differentiated and buyers have considerable discretion over whether and when they purchase the product

E. When buyers are few in number and/or often purchase in large quantities

Definition
A. When buyers are unlikely to integrate backward into the business of sellers
Term

55. Buyers are in position to exert strong bargaining power in dealing with sellers when

A. their costs to switch to competing brands or to substitute products are relatively high.

B. a particular seller's product delivers quality or performance that is very important to the buyer and is not matched by other brands.

C. they buy the product infrequently or in small quantities and are not particularly well-informed about sellers' products, prices, and costs.

D. buyer demand is growing rapidly.

E. the number of buyers is small or when a customer is particularly important to a seller.

Definition
E. the number of buyers is small or when a customer is particularly important to a seller.
Term

56. Which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak?

A. Whether certain customers offer sellers important market exposure or prestige

B. Whether customers are relatively well informed about sellers' products, prices, and costs

C. Whether buyer needs and expectations are changing rapidly or slowly

D. Whether sellers' products are highly differentiated, making it troublesome or costly for buyers to switch to competing brands or to substitute products

E. Whether sellers pose little threat of forward integration into the product market of their customers and whether buyers pose a major threat to integrate backward into the product market of sellers

Definition
C. Whether buyer needs and expectations are changing rapidly or slowly
Term

57. A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers

and customers

A. lacks powerful driving forces.

B. gives each industry competitor the best potential for building sustainable competitive advantage over rival firms.

C. makes it hard for industry members to compete successfully unless they can strongly differentiate their products.

D. is conducive to industry members earning attractive profits.

E. requires that industry members have low costs in order to be competitively successful.

Definition
D. is conducive to industry members earning attractive profits.
Term

58. A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers

A. is competitively unattractive from the standpoint of earning good profits.

B. offers little ability to build a sustainable competitive advantage.

C. is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand.

D. offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage.

E. requires that industry members have a strongly differentiated product offering in order to be profitable.

Definition
A. is competitively unattractive from the standpoint of earning good profits.
Term

59. As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces,

A. the stronger are the industry's driving forces.

B. the lower the combined profitability of industry members.

C. the fewer companies that can achieve a competitive advantage via anything other than being the industry's low-cost leader.

D. the larger the number of competitive advantage opportunities for industry members.

E. the greater the number of industry key success factors.

Definition
B. the lower the combined profitability of industry members.
Term

60. Factors that cause the rivalry among competing sellers to be weak include

A. low buyer switching costs and rival sellers that are relatively equal is size and capability.

B. rapid growth in buyer demand and high buyer switching costs.

C. few industry rivals that any one company's actions can easily be anticipated and countered by its rivals.

D. low barriers to entry and weakly differentiated products among rival sellers.

E. slow growth in buyer demand and strongly differentiated products.

Definition
B. rapid growth in buyer demand and high buyer switching costs.
Term

61. The intensity of rivalry among competing sellers does not depend on whether

A. the industry has more than two strong driving forces and whether the industry has more than 2 strategic groups.

B. competitors are diverse in terms of visions, strategic intents, objectives, strategies, resources and countries of origin.

C. strong companies outside the industry have acquired weak firms in the industry and are launching aggressive moves to transform the acquired companies into strong market contenders.

D. one or two rivals have particularly powerful and successful strategies.

E. industry conditions tempt industry members to use price cuts or other competitive weapons to boost unit sales.

Definition
A. the industry has more than two strong driving forces and whether the industry has more than 2 strategic groups.
Term

62. In which of the following instances are industry members not subject to stronger competitive pressures from substitute products?

A. The costs to buyers of switching over to the substitutes are low.

B. Buyers are dubious about using substitutes.

C. The quality and performance of the substitutes is well matched to what buyers need to meet their requirements.

D. Buyer brand loyalty is weak.

E. Substitutes are readily available at competitive prices.

Definition
B. Buyers are dubious about using substitutes.
Term

63. Just how strong the competitive pressures are from substitute products depends on

A. whether the available substitutes are strongly or weakly differentiated and whether buyers make purchases frequently or infrequently.

B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.

C. whether the available substitutes are products or services.

D. whether the producers of substitutes have ample budgets for new product R&D.

E. the speed with which buyer needs and expectations are changing.

Definition
B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.
Term

64. Industry conditions change

A. because of such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers.

B. because of newly-emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups.

C. because new industry key success factors emerge.

D. because important forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions.

E. chiefly because of changes in the barriers to entry and the degree of competition from substitute products.

Definition
D. because important forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions.
Term

65. The "driving forces" in an industry

A. are usually triggered by changing technology or stronger learning/experience curve effects.

B. usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers.

C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

D. appear when an industry begins to mature but are seldom present during early stages of the industry life-cycle.

E. are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

Definition
C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.
Term

66. The task of driving forces analysis is to

A. develop a comprehensive list of all the potential causes of changing industry conditions.

B. predict which new driving forces will emerge next.

C. determine which of the five competitive forces is the biggest driver of industry change.

D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.

E. learn what the industry key success factors are and how they might change in the future.

Definition
D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.
Term

67. Driving forces analysis

A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces.

B. identifies which strategic group is the most powerful.

C. helps managers identify which industry member is likely to become (or remain) the industry leader and why.

D. helps managers identify which key success factors are most likely to help their company gain a competitive advantage.

E. helps managers identify which of the five competitive forces will be the strongest driver of industry change.

Definition
A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces.
Term

68. Which of the following is not generally a "driving force" capable of producing fundamental changes in industry and competitive conditions?

A. Changes in the long-term industry growth rate

B. Increasing globalization of the industry

C. Product innovation and technological change

D. Ups and downs in the economy and in interest rates

E. New government regulations or significant changes in government policy toward the industry

Definition
D. Ups and downs in the economy and in interest rates
Term

69. Which of the following are most unlikely to qualify as driving forces?

A. Changes in the long-term industry growth rate, the entry or exit of major firms, and changes in cost and efficiency

B. Increasing globalization of the industry and product innovation

C. New Internet technology applications, new government regulations, and significant changes in government policy toward the industry

D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances

E. Marketing innovations and changes in who buys the industry's product and how they use it

Definition
D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances
Term

70. Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

A. Changes in who buys the product and how they use it and changes in the long-term industry growth rate

B. Entry or exit of major firms, product innovation, and marketing innovation

C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration

D. Growing buyer preferences for differentiated products instead of mostly standardized or identical products

E. Changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities

Definition
C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration
Term

71. Which of the following is most likely to qualify as a driving force?

A. Increases in price-cutting by rival sellers and the launch of major new advertising campaigns by one or more rivals

B. Wildly successful introduction of innovative new products by one or more industry rivals that force other rivals to respond quickly or lose a major share of their customers to the innovating rival(s)

C. An increase in the prices of substitute products

D. Decisions on the part the industry's three biggest competitors not to pursue a strategy of striving to be the industry's low-cost leader

E. Decisions by one or more outsiders not to attempt to enter the industry

Definition
B. Wildly successful introduction of innovative new products by one or more industry rivals that force other rivals to respond quickly or lose a major share of their customers to the innovating rival(s)
Term

72. Which one of the following is not a common type of driving force?

A. Reductions in uncertainty and business risk

B. Changing societal concerns, attitudes, and lifestyles

C. Diffusion of technical know-how across more companies and more countries

D. Increasing efforts on the part of industry members to collaborate closely with their suppliers

E. Technological change and manufacturing process innovation

Definition
D. Increasing efforts on the part of industry members to collaborate closely with their suppliers
Term

73. Increasing globalization of the industry can be a driving force because

A. the products of foreign competitors are nearly always cheaper or of better quality than those of domestic companies.

B. foreign producers typically have lower costs, greater technological expertise, and more product innovation capabilities than domestic firms.

C. it tends to increase rivalry among industry members and often shifts the pattern of competition among an industry's major players, favoring some and disadvantaging others.

D. it results in companies having fewer competitors and a strategic group map with fewer circles.

E. market growth rates go up, product innovation speeds up, and new firms are likely to enter the industry.

Definition
C. it tends to increase rivalry among industry members and often shifts the pattern of competition among an industry's major players, favoring some and disadvantaging others.
Term

74. Driving forces analysis helps managers identify whether

A. the combined impacts of the driving forces will act to increase/decrease market demand, increase/decrease competition, and raise/lower industry profitability in the years ahead.

B. it will become more or less important to aim the company's strategy at being the industry's low-cost producer.

C. the driving forces will have a bigger impact on company profitability than competitive forces.

D. the industry is likely to become more or less vertically integrated and why.

E. competitive advantages are likely to grow or diminish in importance.

Definition
A. the combined impacts of the driving forces will act to increase/decrease market demand, increase/decrease competition, and raise/lower industry profitability in the years ahead.
Term

75. An industry's driving forces

A. are generally determined by the sizes of strategic groups and the power of rival firms' competitive strategies.

B. generally act in ways which will strengthen or weaken market demand, competition, and industry profitability in future years.

C. frequently cause a reduction in the bargaining power of buyers.

D. are normally triggered by ups and downs in the economy, higher or lower interest rates, or important new strategic alliances.

E. can be triggered by such factors as growing competitive pressures from substitute products, and the efforts of rival firms to employ new or different offensive strategies.

Definition
B. generally act in ways which will strengthen or weaken market demand, competition, and industry profitability in future years.
Term

76. In analyzing driving forces, the strategist's role is to

A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability.

B. predict future marketing innovations and how fast the industry is likely to globalize.

C. evaluate what stage of the life cycle the industry is in and when it is likely to move to the next stage.

D. determine who is likely to exit the industry and what changes can be expected in the industry's strategic group map.

E. forecast fluctuations in product demand and how buyer needs will most likely change.

Definition
A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability.
Term

77. Which one of the following is not an integral part of driving forces analysis?

A. Identifying the specific factors causing fundamental changes in industry conditions and/or the industry's competitive structure

B. Determining whether the driving forces are acting to cause one or more industry rivals to shift to a different strategic group

C. Determining whether the driving forces are acting to strengthen or weaken market demand

D. Determining whether the driving forces are acting to make competition more or less intense

E. Determining whether the driving forces are acting to raise or lower industry profitability

Definition
B. Determining whether the driving forces are acting to cause one or more industry rivals to shift to a different strategic group
Term

78. The real payoff for strategy making comes when managers draw conclusions about

A. what strategy adjustments are needed to deal with the changes in conditions.

B. determining the overall strength of the five competitive forces.

C. determining whether the industry's strategic group map will be static or dynamic.

D. conditions in the economy at large.

E. the extent to which rivals have more than two competitively valuable competencies or capabilities

Definition
A. what strategy adjustments are needed to deal with the changes in conditions.
Term

79. What is the best technique for revealing the market position of industry competitors?

A. Strategic group mapping.

B. Global industry change.

C. Dynamic mapping analysis.

D. Distribution analysis.

E. None of these.

Definition
A. Strategic group mapping.
Term

80. A strategic group

A. consists of those industry members that are growing at about the same rate and have similar product line breadth.

B. includes all rival firms having comparable profitability.

C. is a cluster of industry rivals that have similar competitive approaches and market positions.

D. consists of those firms whose market shares are about the same size.

E. is made up of those firms having comparable profit margins.

Definition
C. is a cluster of industry rivals that have similar competitive approaches and market positions.
Term

81. A strategic group consists of those firms in an industry that

A. are subject to the same driving forces.

B. are placing about the same emphasis on each distribution channel.

C. use the same key success factors to differentiate their products.

D. employ similar competitive approaches and occupy similar positions in the market.

E. have similar size market shares.

Definition
D. employ similar competitive approaches and occupy similar positions in the market.
Term

82. Strategic group mapping is a technique for displaying

A. how many rivals are pursuing each type of strategy.

B. which companies have the biggest market share and who the industry leader really is.

C. the different market or competitive positions that rival firms occupy in an industry and identifying each rival's closest competitors.

D. which companies have the highest degrees of brand loyalty.

E. which companies have failing business models.

Definition
C. the different market or competitive positions that rival firms occupy in an industry and identifying each rival's closest competitors.
Term

83. Which one of the following pairs of variables is least likely to be useful in drawing a strategic group map?

A. Geographic coverage and degree of vertical integration

B. Brand name reputation and distribution channel emphasis

C. Product quality and product line breadth

D. Level of profitability and size of market share

E. Price/quality range and whether the company's product appeals to many or few types of buyers

Definition
D. Level of profitability and size of market share
Term

84. The concept of strategic groups is relevant to industry and competitive analysis because

A. firms in the same strategic groups are rarely close competitors—a firm's closest competitors are usually in distant strategic groups.

B. strategic group maps help identify each company's market position and its closest competitors.

C. competition grows in intensity as the number and diversity of the strategic groups in an industry increases.

D. the profit potential of firms in the same strategic group is usually very similar.

E. competitive pressures tend to be weaker within strategic groups than across strategic groups.

Definition
B. strategic group maps help identify each company's market position and its closest competitors.
Term

85. In mapping strategic groups

A. one strategic variable and one financial variable should be used as axes for the map.

B. it is important for the variables used as axes to be highly correlated.

C. the best variables to use as axes for the map are those that differentiate how rivals have positioned themselves in the marketplace.

D. it is important to use price as the variable for the vertical axis.

E. the primary objective is to determine which strategic groups are profitable and which are not.

Definition
C. the best variables to use as axes for the map are those that differentiate how rivals have positioned themselves in the marketplace.
Term

86. Which of the following is not an appropriate guideline for developing a strategic group map for a given industry?

A. The variables chosen as axes for the map should indicate big differences in how rivals have positioned themselves to compete in the marketplace.

B. The variables chosen as axes for the map can be either quantitative or qualitative.

C. The variables chosen as axes for the map should be highly correlated.

D. Several maps should be drawn if more than one pair of variables help illuminate differences in the competitive positioning of industry members.

E. The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

Definition
C. The variables chosen as axes for the map should be highly correlated.
Term

87. With the aid of a strategic group map, one can

A. readily identify the entry and exit barriers for each strategic group.

B. pinpoint precisely which firms are in profitable strategic groups and which are not.

C. identify which competitive forces are strong and which are weak.

D. measure accurately whether across-group rivalry is stronger than within-group rivalry or vice versa.

E. often learn to what extent industry driving forces and competitive pressures favor some companies or groups and hurt others.

Definition
E. often learn to what extent industry driving forces and competitive pressures favor some companies or groups and hurt others.
Term

88. One of the things that can be gleaned from a strategic group map of industry rivals is

A. which rivals have been in business longer and thus have greater access to experience curve effects.

B. which rivals have newer manufacturing facilities.

C. which strategic groups have the highest profit margins and the highest customer switching costs.

D. whether profit prospects vary among strategic groups due to strengths and weaknesses in their respective market positions on the map (perhaps because competitive pressures are acting to favor some strategic groups and to disadvantage other groups).

E. which strategic groups are currently viewed as the most prestigious by customers and which companies are being shunned by customers because of high prices and relatively low product quality.

Definition
D. whether profit prospects vary among strategic groups due to strengths and weaknesses in their respective market positions on the map (perhaps because competitive pressures are acting to favor some strategic groups and to disadvantage other groups).
Term

89. The payoff of good scouting reports on rivals is improved ability to

A. anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace.

B. determine which rivals are in the best strategic group.

C. figure out how many key success factors a rival has.

D. determine whether a rival is gaining or losing market share.

E. determine whether a rival has the best strategy and is the industry leader.

Definition
A. anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace.
Term

90. Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because

A. it identifies who the industry's current market share leaders are.

B. it helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals.

C. good scouting reports help identify which rival is in which strategic group.

D. it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes.

E. it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

Definition
B. it helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals.
Term

91. Good competitive intelligence about the strategies and competitive strengths and weaknesses of rival companies helps management determine

A. which competitor has the best strategy and which competitors have flawed or weak strategies.

B. which rivals are poised to gain market share and which seem destined to lose market share.

C. which rivals are likely to rank among the industry leaders on the road ahead.

D. which rivals are likely to initiate what kinds of fresh strategic moves and why.

E. All of these.

Definition

A. which competitor has the best strategy and which competitors have flawed or weak strategies.

B. which rivals are poised to gain market share and which seem destined to lose market share.

C. which rivals are likely to rank among the industry leaders on the road ahead.

D. which rivals are likely to initiate what kinds of fresh strategic moves and why.

E. All of these.

Term

92. In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as:

A. Which rivals badly need to increase their unit sales and market share and what new offensive initiatives are they likely to employ?

B. Which rivals are poised to gain market share and which seem destined to lose market share?

C. Which rivals are good candidates to be acquired?

D. Which rivals are likely to enter new geographic markets or expand their product offerings (so as to enter new market segments where they currently do not have a presence)?

E. All of these.

Definition

A. Which rivals badly need to increase their unit sales and market share and what new offensive initiatives are they likely to employ?

B. Which rivals are poised to gain market share and which seem destined to lose market share?

C. Which rivals are good candidates to be acquired?

D. Which rivals are likely to enter new geographic markets or expand their product offerings (so as to enter new market segments where they currently do not have a presence)?

E. All of these.

Term

1. The reasons why a company opts to expand outside its home market include 

  




(p. 206- A. gaining access to new customers for the company's products/services.

207)

 B. spreading its business risk across a wider market base.

C. achieving lower costs and enhancing the company's competitiveness.

D. a desire to capitalize on its core competencies and capabilities.

E. All of these.

 

 AACSB: Analytic


Blooms: Remember


Difficulty: Easy


Learning Objective: 07-01 Develop an understanding of the primary reasons companies choose to compete in international markets.


Thompson - Chapter 07 #1


Topic: Foreign Markets

 

2. Which of the following is not a typical reason for companies to expand into the markets of foreign 



(p. 206- countries? 

  


207)

 A. To gain access to new customers

BTo strengthen its capability to employ vertical integration strategies, especially those that 

. involve partial integration (building positions in selected stages of the industry's value chain)

C. To achieve lower costs and enhance the firm's competitiveness

D. To capitalize on company competencies and capabilities

E. To spread business risk across a wider geographic market base

 

 AACSB: Analytic


Blooms: Remember


Difficulty: Easy


Learning Objective: 07-01 Develop an understanding of the primary reasons companies choose to compete in international markets.


Thompson - Chapter 07 #2


Topic: Foreign Markets

 

3. Which one of the following is not a reason why a company decides to enter foreign markets? 

  




(p. 206- A. To spread business risk across a wider geographic market base

207)

 B. To capitalize on company competencies and capabilities

C. To achieve lower costs and enhance the firm's competitiveness

D.To gain economic incentives offered by governments of developing countries wishing to expand 

  industry and job creation

E. To gain access to more buyers for the company's products/services

 

 AACSB: Analytic


Blooms: Remember


Difficulty: Medium


Learning Objective: 07-01 Develop an understanding of the primary reasons companies choose to compete in international markets.


Thompson - Chapter 07 #3


Topic: Foreign Markets

 

4. Why is crafting a strategy to compete in one or more foreign markets inherently complex? 

  




(p. 207) A. Because factors that affect industry competitiveness vary from country to country.

B. Because of the potential for location-based advantages in certain countries.

C.Because different government policies and economic conditions make the business climate more 

  favorable in some countries than others.

D. Because of the risks for shifts in currency exchange rates.

E. All of these.

1. The reasons why a company opts to expand outside its home market include 
  
 
 
 
(p. 206- A. gaining access to new customers for the company's products/services.
207)
 B. spreading its business risk across a wider market base.
C. achieving lower costs and enhancing the company's competitiveness.
D. a desire to capitalize on its core competencies and capabilities.
E. All of these.
 
 AACSB: Analytic
 
Blooms: Remember
 
Difficulty: Easy
 
Learning Objective: 07-01 Develop an understanding of the primary reasons companies choose to compete in international markets.
 
Thompson - Chapter 07 #1
 
Topic: Foreign Markets
 
2. Which of the following is not a typical reason for companies to expand into the markets of foreign 
 
 
(p. 206- countries? 
  
 
207)
 A. To gain access to new customers
BTo strengthen its capability to employ vertical integration strategies, especially those that 
. involve partial integration (building positions in selected stages of the industry's value chain)
C. To achieve lower costs and enhance the firm's competitiveness
D. To capitalize on company competencies and capabilities
E. To spread business risk across a wider geographic market base
 
 AACSB: Analytic
 
Blooms: Remember
 
Difficulty: Easy
 
Learning Objective: 07-01 Develop an understanding of the primary reasons companies choose to compete in international markets.
 
Thompson - Chapter 07 #2
 
Topic: Foreign Markets
 
3. Which one of the following is not a reason why a company decides to enter foreign markets? 
  
 
 
 
(p. 206- A. To spread business risk across a wider geographic market base
207)
 B. To capitalize on company competencies and capabilities
C. To achieve lower costs and enhance the firm's competitiveness
D.To gain economic incentives offered by governments of developing countries wishing to expand 
  industry and job creation
E. To gain access to more buyers for the company's products/services
 
 AACSB: Analytic
 
Blooms: Remember
 
Difficulty: Medium
 
Learning Objective: 07-01 Develop an understanding of the primary reasons companies choose to compete in international markets.
 
Thompson - Chapter 07 #3
 
Topic: Foreign Markets
 
4. Why is crafting a strategy to compete in one or more foreign markets inherently complex? 
  
 
 
 
(p. 207) A. Because factors that affect industry competitiveness vary from country to country.
B. Because of the potential for location-based advantages in certain countries.
C.Because different government policies and economic conditions make the business climate more 
  favorable in some countries than others.
D. Because of the risks for shifts in currency exchange rates.
E. All of these.
 
Definition
A. are those competitive aspects that most affect industry members' abilities to prosper in the marketplace—specific strategy elements, product attributes, competencies, competitive capabilities, and  market achievements that spell the difference between being a strong competitor and a weak competitor.
Term

94. An industry's key success factors

A. are a function of market share, entry barriers, economies of scale, degree of vertical integration, and industry profitability.

B. vary according to whether an industry has high or low long-term attractiveness.

C. can be determined from an analysis of an industry's dominant economic characteristics, what competition is like, the impacts of the driving forces, the comparative market positions of industry  members, and the likely next moves of industry rivals.

D. can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies.

E. depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

Definition
C. can be determined from an analysis of an industry's dominant economic characteristics, what competition is like, the impacts of the driving forces, the comparative market positions of industry  members, and the likely next moves of industry rivals.
Term

95. In identifying an industry's key success factors, strategists should

A. try to single out all factors which play a major role in shaping whether buyer demand grows rapidly or slowly.

B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage.

C. consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak.

D. consider what it will take to overtake the company with the industry's overall best strategy.

E. focus their attention on what it will take to capitalize on impacts of the industry's driving forces.

Definition
B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage.
Term

96. Which of the following is not a question asked to deduce a marketing-related key success factor?

A. What are the industry product R & D capabilities and expertise in product design?

B. What basis do buyers choose between the competing brands of sellers?

C. What product attributes and service characteristics are crucial?

D. What resources must a company have to be competitive?

E. What shortcomings are almost certain to put a company at a significant disadvantage?

Definition
A. What are the industry product R & D capabilities and expertise in product design?
Term

97. Which of the following can aid industries in identifying key success factors?

A. Global distribution capabilities

B. Crucial product attributes and service characteristics

C. Low distribution costs

D. Accurate filling of buyer orders

E. Short delivery time capability

Definition
B. Crucial product attributes and service characteristics
Term

98. Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity?

A. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average

B. An assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing, and whether economies of scale and experience curve effects are a key success factor

C. Whether there are more than 5 key success factors and more than 5 barriers to entry

D. Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group

E. Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product

Definition
A. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average
Term

99. Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors?

A. The industry's growth potential, whether competitive pressures will likely grow stronger or weaker, and whether the industry's future profit prospects are above average, average, or below average

B. An assessment of the degrees of business risk and uncertainty in the industry's future

C. Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces

D. The severity of the problems confronting the industry as a whole

E. Whether the industry's product is strongly or weakly differentiated

Definition
E. Whether the industry's product is strongly or weakly differentiated
Term

100. Evaluating whether an industry's environment presents a company with a sufficiently attractive business opportunity involves

A. sizing up overall industry and competitive conditions to determine whether the industry's overall profit prospects are above average, average, or below average.

B. determining which firms in the industry have a competitive advantage and how they got their advantage.

C. determining the overall strength of the five competitive forces.

D. constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group to determine the overall attractiveness of all the strategic groups.

E. using value chain analysis to determine the relative cost positions of rival firms and to learn who the industry's low-cost producer is.

Definition
A. sizing up overall industry and competitive conditions to determine whether the industry's overall profit prospects are above average, average, or below average.
Term

101. What are the seven key questions which form the framework of thinking strategically about a company's industry and competitive environment?

(p. 53) 

Definition

1. Does the industry offer attractive opportunities for growth?

2. What kinds of competitive forces are industry members facing, and how strong is each force?

3. What factors are driving changes in the industry, and what impact will these changes have on competitive intesity and industry profitability?

4. What market positions do industry rivals occupy--who is strongly positioned and who is not?

5. What strategic moves are rivals likely to make next?

6. What are the key factors for competitive success in the industry?

7. Does the industry offer good prospects for attractive profits?

Term

102. Draw the five-forces model of competition and briefly describe the relevance of each of the five forces in determining the overall strength of competitive pressures a company faces. Which of the five competitive forces is typically the strongest?

(p. 55-70) 

Definition
Term

103. What are the five competitive forces that comprise the five-forces model of competition?

(p. 55)

Definition

1. Rivalry among competing sellers

2. Potential new entrants

3. Imitation and substitutions product offerings

4. Buyers

5. Sellers

Term

104. Competitive markets are economic battlefields. True or false? Explain.

(p. 54)

Definition
Term

105. Identify and briefly explain any four of the factors that influence the strength or intensity of competitive rivalry among an industry's member firms.

(p. 56-58) 

Definition
Term

106. Identify five factors that tend to intensify competitive rivalry among an industry's member firms.

(p. 57)

Definition
Term

107. Identify five factors that tend to weaken the intensity of competitive rivalry among an industry's member firms.

(p. 57) 

Definition
Term

108. Identify and briefly describe five common barriers to entering an industry.

(p. 59-60)

Definition
Term

109. Identify and briefly explain any three factors that intensify competitive pressures stemming from the threat that new firms will enter the industry.

(p. 59-61) 

Definition
Term

110. Identify three conditions that tend to make potential entry a strong competitive force.

(p. 59-61)

Definition
Term

111. Identify and briefly explain any three factors that weaken the competitive pressures stemming from the threat that new firms will enter the industry.

(p. 59-61) 

Definition
Term

112. Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

(p. 63) 

Definition
Term

113. Identify and briefly explain any three of the factors that influence the bargaining strength and leverage of suppliers.

(p. 63) 

Definition
Term

114. Identify and briefly explain any three factors that lead to strong bargaining power on the part of suppliers.

(p. 65-67) 

Definition
Term

115. Identify and briefly explain any three factors that lead to weak bargaining power on the part of suppliers.

(p. 28-31) 

Definition
Term

116. Explain why low switching costs and weakly differentiated products tend to give buyers a high degree of bargaining power.

(p. 3-68) 

Definition
Term

117. Not all buyers of an industry's product are likely to possess the same degree of bargaining power or leverage over the terms and conditions under which they purchase the product. True or false? Explain.

(p. 68-70) 

Definition
Term

118. Identify and briefly discuss any three of the factors that influence the bargaining strength and leverage of buyers.

(p. 68-70) 

Definition
Term

119. Identify and briefly explain any three factors that lead to strong bargaining power on the part of buyers.

(p. 68-70) 

Definition
Term

120. Identify and briefly explain any three factors that lead to weak bargaining power on the part of buyers.

(p. 68-70) 

Definition
Term

121. Explain the meaning and significance of each of the following:

a.) bargaining power of suppliers

b.) driving forces

c.) strategic group mapping

d.) key success factors

(p. 67-69, 72, 77, 82)

Definition
Term

122. In doing driving forces analysis, is it sufficient to simply identify the driving forces that are operating to alter industry and competitive conditions? Why or why not? If not, then explain what else is required for a complete driving forces assessment.

(p. 76) 

Definition
Term

123. Identify at least five common driving forces and briefly explain how each one can produce important changes in industry and competitive conditions.

(p. 72-75) 

Definition
Term

124. Identify at least three benefits of constructing a strategic group map.

(p. 79-80)

Definition
Term

125. What is the analytical value of studying competitors and trying to predict what moves rivals will make next?

(p. 81-82) 

Definition
Term

126. What is the strategy-making value of identifying an industry's key success factors?

(p. 82-83)

Definition
Term

127. Identify four factors that affect whether an industry does or does not present a company with a good business opportunity?

(p. 84) 

Definition
Term

128. Can an industry be attractive to one company and unattractive to another company? Why or why not?

(p. 84)

Definition
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