Question 1

Entry barriers in embryonic industries tend to be based on:

Accepted Answer

A) brand loyalty. 
B) economies of scale. 
C) absolute cost advantages. 
D) regulatory advantage. 
E) technological knowhow. 
A) brand loyalty. 
B) economies of scale. 
C) absolute cost advantages. 
D) regulatory advantage. 
E) technological knowhow.

Question 2

The Internet is an example of a:

Accepted Answer

A) technological force. 
B) social force. 
C) macroeconomic force. 
D) demographic force. 
E) global force. 
A) technological force. 
B) social force. 
C) macroeconomic force. 
D) demographic force. 
E) global force.

Question 3

Which of the following statements is true about government regulations in the context of entry barriers of an industry?

Accepted Answer

A) Government deregulation in an industry results in significant reduction in competition. 
B) Government regulation is not a major entry barrier for any industries. 
C) Falling entry barriers due to government deregulation results in higher competition and lower industry profit rates. 
D) The threat of new entrants reduces when the government deregulates an industry. 
E) Companies that enjoy brand loyalty and have significant scale economies are the ones who face major threat of competition due to government deregulation. 
A) Government deregulation in an industry results in significant reduction in competition. 
B) Government regulation is not a major entry barrier for any industries. 
C) Falling entry barriers due to government deregulation results in higher competition and lower industry profit rates. 
D) The threat of new entrants reduces when the government deregulates an industry. 
E) Companies that enjoy brand loyalty and have significant scale economies are the ones who face major threat of competition due to government deregulation.

Question 4

Philip Morris capitalized on the growing health consciousness trend when it acquired Miller Brewing Company,and then redefined competition in the beer industry with its introduction of low-calorie beer (Miller Lite).This health trend represents a _____force.

Accepted Answer

A) social 
B) political 
C) legal 
D) technological 
E) demographic 
A) social 
B) political 
C) legal 
D) technological 
E) demographic

Question 5

Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business.

Accepted Answer

A) True 
 B)False

Question 6

Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT a determinant of the extent of rivalry among established companies?

Accepted Answer

A) Industry competitive structure 
B) Demand conditions 
C) The cost structure of firms in an industry 
D) Exit barriers 
E) The power of buyers 
A) Industry competitive structure 
B) Demand conditions 
C) The cost structure of firms in an industry 
D) Exit barriers 
E) The power of buyers

Question 8

Market segments are distinct groups of customers within a market that can be distinguished from each other based on their individual attributes and specific demands.

Accepted Answer

A) True 
 B)False

Question 9

Brand loyalty can be created by:

Accepted Answer

A) minimal advertising. 
B) not using patents to protect products. 
C) cutting the costs for research and development. 
D) emphasizing high product quality. 
E) minimizing after-sales service 
A) minimal advertising. 
B) not using patents to protect products. 
C) cutting the costs for research and development. 
D) emphasizing high product quality. 
E) minimizing after-sales service

Question 10

A consolidated industry structure:

Accepted Answer

A) consists of a large number of small companies. 
B) can be seen in agriculture, dry cleaning, health clubs, and real estate brokerage. 
C) consists of few companies that are in a position to determine industry price. 
D) provides no scope for oligopoly to exist. 
E) is characterized by low-entry barriers and commodity-type products. 
A) consists of a large number of small companies. 
B) can be seen in agriculture, dry cleaning, health clubs, and real estate brokerage. 
C) consists of few companies that are in a position to determine industry price. 
D) provides no scope for oligopoly to exist. 
E) is characterized by low-entry barriers and commodity-type products.

Question 11

_____ arise when a customer invests time,energy,and money shifting from the products offered by one established company to the products offered by a new entrant.

Accepted Answer

A) Overhead costs 
B) Incremental costs 
C) Marginal costs 
D) Opportunity costs 
E) Switching costs 
A) Overhead costs 
B) Incremental costs 
C) Marginal costs 
D) Opportunity costs 
E) Switching costs

Question 12

As an industry enters the decline stage:

Accepted Answer

A) growth becomes negative. 
B) rivalry among established companies usually decreases. 
C) competitive pressures abate. 
D) capacity reduces. 
E) demand remains the same. 
A) growth becomes negative. 
B) rivalry among established companies usually decreases. 
C) competitive pressures abate. 
D) capacity reduces. 
E) demand remains the same.

Question 13

An industry's buyers have high bargaining power when:

Accepted Answer

A) they purchase in small quantities. 
B) switching costs are low. 
C) it is economically impossible for them to purchase an input from several companies at once. 
D) the supply industry depends upon buyers for a very small percentage of its total orders. 
E) the industry is a monopoly. 
A) they purchase in small quantities. 
B) switching costs are low. 
C) it is economically impossible for them to purchase an input from several companies at once. 
D) the supply industry depends upon buyers for a very small percentage of its total orders. 
E) the industry is a monopoly.

Question 14

A sector refers to a group of:

Accepted Answer

A) government regulators. 
B) closely related industries. 
C) manufacturing plants of a company based in the same location. 
D) business units owned by a single firm. 
E) companies that manufacture similar products under different brand names. 
A) government regulators. 
B) closely related industries. 
C) manufacturing plants of a company based in the same location. 
D) business units owned by a single firm. 
E) companies that manufacture similar products under different brand names.

Question 15

Economies of scale can arise from:

Accepted Answer

A) cost reductions gained through decreased production. 
B) high prices on bulk purchases of raw material inputs and component parts. 
C) an advantage gained by spreading fixed production costs over a large production volume. 
D) increased spending on marketing and advertising activities. 
E) poor production operations. 
A) cost reductions gained through decreased production. 
B) high prices on bulk purchases of raw material inputs and component parts. 
C) an advantage gained by spreading fixed production costs over a large production volume. 
D) increased spending on marketing and advertising activities. 
E) poor production operations.

Question 16

A technological change,such as the rise of the Internet,can represent either an opportunity or a threat.

Accepted Answer

A) True 
 B)False

Question 17

The bargaining power of an industry's suppliers is greater when:

Accepted Answer

A) the supply industry is fragmented. 
B) switching costs are minimal for companies because of little difference among products offered by different suppliers. 
C) the industry buys in large quantities. 
D) the product that suppliers sell has many substitutes and is not vital to the companies. 
E) the industry is not an important customer to the suppliers. 
A) the supply industry is fragmented. 
B) switching costs are minimal for companies because of little difference among products offered by different suppliers. 
C) the industry buys in large quantities. 
D) the product that suppliers sell has many substitutes and is not vital to the companies. 
E) the industry is not an important customer to the suppliers.

Question 18

Changes in the characteristics of a population,such as age or race,are irrelevant to the analysis of an industry's macroenvironment.

Accepted Answer

A) True 
 B)False

Question 19

An industry can be defined as a group of:

Accepted Answer

A) companies offering products or services that are close substitutes for each other. 
B) manufacturing plants of a single company. 
C) different kinds of companies that are based in the same geographic location. 
D) companies that are different but generate similar amounts of revenues. 
E) brands that offer different products but are owned by a single firm. 
A) companies offering products or services that are close substitutes for each other. 
B) manufacturing plants of a single company. 
C) different kinds of companies that are based in the same geographic location. 
D) companies that are different but generate similar amounts of revenues. 
E) brands that offer different products but are owned by a single firm.

Question 20

A company's closest competitors are those in its strategic group.

Accepted Answer

A) True 
 B)False

Entry barriers in embryonic industries tend to be based on:

The Internet is an example of a:

Which of the following statements is true about government regulations in the context of entry barriers of an industry?

Philip Morris capitalized on the growing health consciousness trend when it acquired Miller Brewing Company,and then redefined competition in the beer industry with its introduction of low-calorie beer (Miller Lite).This health trend represents a _____force.

Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business.

Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors.

Which of the following is NOT a determinant of the extent of rivalry among established companies?

Market segments are distinct groups of customers within a market that can be distinguished from each other based on their individual attributes and specific demands.

Brand loyalty can be created by:

A consolidated industry structure:

_____ arise when a customer invests time,energy,and money shifting from the products offered by one established company to the products offered by a new entrant.

As an industry enters the decline stage:

An industry's buyers have high bargaining power when:

A sector refers to a group of:

Economies of scale can arise from:

A technological change,such as the rise of the Internet,can represent either an opportunity or a threat.

The bargaining power of an industry's suppliers is greater when:

Changes in the characteristics of a population,such as age or race,are irrelevant to the analysis of an industry's macroenvironment.

An industry can be defined as a group of:

A company's closest competitors are those in its strategic group.

Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional Level Strategies

Business Level Strategy

Business Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

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Exam 2: External Analysis: The Identification of Opportunities and Threats

Entry barriers in embryonic industries tend to be based on:

The Internet is an example of a:

Which of the following statements is true about government regulations in the context of entry barriers of an industry?

Philip Morris capitalized on the growing health consciousness trend when it acquired Miller Brewing Company,and then redefined competition in the beer industry with its introduction of low-calorie beer (Miller Lite).This health trend represents a _____force.

Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business.

Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors.

Which of the following is NOT a determinant of the extent of rivalry among established companies?

Market segments are distinct groups of customers within a market that can be distinguished from each other based on their individual attributes and specific demands.

Brand loyalty can be created by:

A consolidated industry structure:

_____ arise when a customer invests time,energy,and money shifting from the products offered by one established company to the products offered by a new entrant.

As an industry enters the decline stage:

An industry's buyers have high bargaining power when:

A sector refers to a group of:

Economies of scale can arise from:

A technological change,such as the rise of the Internet,can represent either an opportunity or a threat.

The bargaining power of an industry's suppliers is greater when:

Changes in the characteristics of a population,such as age or race,are irrelevant to the analysis of an industry's macroenvironment.

An industry can be defined as a group of:

A company's closest competitors are those in its strategic group.

Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional Level Strategies

Business Level Strategy

Business Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters