Question 1

Which of the following best describes the term,internal rivalry?

Accepted Answer

A)  Divisions competing within a firm for resources 
B)  Differing product lines from one manufacturer competing 
C)  Firms jockeying for share within a market. 
D)  Firms competing for resources to produce goods 
E)  Suppliers dividing factors between competing firms 
A)  Divisions competing within a firm for resources 
B)  Differing product lines from one manufacturer competing 
C)  Firms jockeying for share within a market. 
D)  Firms competing for resources to produce goods 
E)  Suppliers dividing factors between competing firms C

Question 2

Which of the following factors requires the least consideration when assessing supplier power relative to the downstream industry it sells to?

Accepted Answer

A)  Competitiveness of the output market 
B)  Purchase volume of downstream firms 
C)  Availability of substitute inputs 
D)  Threat of forward integration by suppliers 
E)  Ability of suppliers to price discriminate 
A)  Competitiveness of the output market 
B)  Purchase volume of downstream firms 
C)  Availability of substitute inputs 
D)  Threat of forward integration by suppliers 
E)  Ability of suppliers to price discriminate A

Question 3

In which of the following ways can entry erode incumbents' profits?

Accepted Answer

A)  Entrants divide market demand among fewer sellers 
B)  Entrants decrease market concentration 
C)  Entrants usually grow the market for all parties 
D)  Entrants increase market concentration 
E)  Entrants reduce internal rivalry 
A)  Entrants divide market demand among fewer sellers 
B)  Entrants decrease market concentration 
C)  Entrants usually grow the market for all parties 
D)  Entrants increase market concentration 
E)  Entrants reduce internal rivalry B

Question 4

Which of the following is not a part of the five-forces framework?

Accepted Answer

A)  Supplier Power 
B)  Internal rivalry 
C)  Regulation 
D)  Buyer Power 
E)  Substitutes and Complements 
A)  Supplier Power 
B)  Internal rivalry 
C)  Regulation 
D)  Buyer Power 
E)  Substitutes and Complements

Question 5

Which of the following is not a feature of selective contracting (used by Managed Care Organizations)that intensified internal rivalry?

Accepted Answer

A)  Had infrequent (contract lengths of two to three years) and lumpy (one insurer may have represented over 5% of a hospital's business) sales 
B)  Treated all hospitals as identical 
C)  Kept price negotiations between insurers and hospitals secret, encouraging hospitals to lower prices to win contracts 
D)  Contracted with hospitals that patients were most loyal to 
E)  Created pressure for hospitals to win each individual contract with no thought of future consequences 
A)  Had infrequent (contract lengths of two to three years) and lumpy (one insurer may have represented over 5% of a hospital's business) sales 
B)  Treated all hospitals as identical 
C)  Kept price negotiations between insurers and hospitals secret, encouraging hospitals to lower prices to win contracts 
D)  Contracted with hospitals that patients were most loyal to 
E)  Created pressure for hospitals to win each individual contract with no thought of future consequences

Question 6

Substitutes erode profits because of which of the following factor?

Accepted Answer

A)  Substitutes compete for similar inputs driving up production costs 
B)  Substitutes divide demand and drive up internal rivalry 
C)  Firms producing substitutes use similar worker skills dividing the labor pool 
D)  Manufacturers of substitutes enter markets later and have lower sunk costs 
E)  None of the above 
A)  Substitutes compete for similar inputs driving up production costs 
B)  Substitutes divide demand and drive up internal rivalry 
C)  Firms producing substitutes use similar worker skills dividing the labor pool 
D)  Manufacturers of substitutes enter markets later and have lower sunk costs 
E)  None of the above

Question 7

Which of the following is a trend that Chicago area hospitals should least likely be worried about with respect to pricing?

Accepted Answer

A)  The FTC recently won an antitrust case that forced the members of the Evanston Northwestern Healthcare system to negotiate independently with insurers 
B)  There has been considerable consolidation (hospital mergers) in regional submarkets, including the city of Chicago and the important North Shore suburbs 
C)  Employers are asking employees to bear more of their own health care costs. At the same time some employers are reconsidering the decision to opt for wide, but costly MCO networks 
D)  If regulatory barriers fall, entry by specialty hospitals in wealthier communities could skim off some of the areas' most profitable patients 
E)  Employers, payers, regulators and patients are demanding and getting more information about hospital quality 
A)  The FTC recently won an antitrust case that forced the members of the Evanston Northwestern Healthcare system to negotiate independently with insurers 
B)  There has been considerable consolidation (hospital mergers) in regional submarkets, including the city of Chicago and the important North Shore suburbs 
C)  Employers are asking employees to bear more of their own health care costs. At the same time some employers are reconsidering the decision to opt for wide, but costly MCO networks 
D)  If regulatory barriers fall, entry by specialty hospitals in wealthier communities could skim off some of the areas' most profitable patients 
E)  Employers, payers, regulators and patients are demanding and getting more information about hospital quality

Question 8

Which of the following is generally thought of as a buyer in the hospital industry?

Accepted Answer

A)  Pharmaceutical drug houses 
B)  Medical equipment companies 
C)  Technician 
D)  Patients 
E)  Nurse 
A)  Pharmaceutical drug houses 
B)  Medical equipment companies 
C)  Technician 
D)  Patients 
E)  Nurse

Question 9

Which of the following is true about hospital industry profits from 1980 to 2000 and a five forces analysis?

Accepted Answer

A)  Virtually every factor caused profits to increase 
B)  Virtually every factor caused profits to decrease 
C)  Most factors are not applicable to the industry 
D)  The Value Net cannot be used to evaluate the industry 
E)  None of t he above 
A)  Virtually every factor caused profits to increase 
B)  Virtually every factor caused profits to decrease 
C)  Most factors are not applicable to the industry 
D)  The Value Net cannot be used to evaluate the industry 
E)  None of t he above

Question 10

Which of the following is not a potential limitation of the five-forces framework?

Accepted Answer

A)  It pays little attention to factors that might affect demand 
B)  It focuses on a whole industry rather than on individual firms that may occupy unique positions that insulate them from some competitive forces 
C)  The framework does not explicitly account for the role of government, except when government is a supplier or buyer 
D)  The framework provides a structured way to systematically work through wide-ranging and often complex issues 
E)  The framework is a qualitative analysis method 
A)  It pays little attention to factors that might affect demand 
B)  It focuses on a whole industry rather than on individual firms that may occupy unique positions that insulate them from some competitive forces 
C)  The framework does not explicitly account for the role of government, except when government is a supplier or buyer 
D)  The framework provides a structured way to systematically work through wide-ranging and often complex issues 
E)  The framework is a qualitative analysis method

Question 11

Which of the following is not a significant entry barrier in the commercial airframe manufacturing market?

Accepted Answer

A)  High development costs 
B)  Learning curve in production 
C)  Raw materials and labor 
D)  Airlines prefer to purchase from the same manufacturer 
E)  Airlines are reluctant to purchase from startups 
A)  High development costs 
B)  Learning curve in production 
C)  Raw materials and labor 
D)  Airlines prefer to purchase from the same manufacturer 
E)  Airlines are reluctant to purchase from startups

Question 12

How did European governments help Airbus aggressively pursue a 50% market share in its early years of operation?

Accepted Answer

A)  Subsidies 
B)  High-interest loans 
C)  Helping to ensure scope economies from military aircraft division 
D)  Paying in excess of cost for military aircraft 
E)  Guaranteeing a set level of annual aircraft purchases 
A)  Subsidies 
B)  High-interest loans 
C)  Helping to ensure scope economies from military aircraft division 
D)  Paying in excess of cost for military aircraft 
E)  Guaranteeing a set level of annual aircraft purchases

Question 13

Which of following factors should be considered when assessing complements and substitutes?

Accepted Answer

A)  Availability of close substitutes and/or complements 
B)  Price-value characteristics of substitutes/complements 
C)  Price elasticity of industry demand 
D)  All of the above 
E)  None of the above 
A)  Availability of close substitutes and/or complements 
B)  Price-value characteristics of substitutes/complements 
C)  Price elasticity of industry demand 
D)  All of the above 
E)  None of the above

Question 14

Which of the following is not a barrier to entry in professional sports markets?

Accepted Answer

A)  Each league has rules governing the addition of new franchises 
B)  Potential new owners must pay current owners hundreds of millions of dollars 
C)  Most potential owners must offer to build new stadiums 
D)  Incumbent teams have rights to veto franchises in their own geographic markets 
E)  Because the number of potential billionaire owners has risen dramatically, the purchase prices have dropped 
A)  Each league has rules governing the addition of new franchises 
B)  Potential new owners must pay current owners hundreds of millions of dollars 
C)  Most potential owners must offer to build new stadiums 
D)  Incumbent teams have rights to veto franchises in their own geographic markets 
E)  Because the number of potential billionaire owners has risen dramatically, the purchase prices have dropped

Question 15

Which of the following is the most likely substitute for commercial aircraft travel between Chicago and Tokyo?

Accepted Answer

A)  Bicycle 
B)  Teleconferencing 
C)  Automobile 
D)  Commuter train 
E)  Walking 
A)  Bicycle 
B)  Teleconferencing 
C)  Automobile 
D)  Commuter train 
E)  Walking

Question 16

Which of the following is not a factor that could intensify internal rivalry in the Chicago hospital market?

Accepted Answer

A)  Relatively large number of hospitals 
B)  Considerable variation in production costs 
C)  Relatively small number of doctors 
D)  Excess capacity 
E)  Aging baby boomers increasing demand for admissions 
A)  Relatively large number of hospitals 
B)  Considerable variation in production costs 
C)  Relatively small number of doctors 
D)  Excess capacity 
E)  Aging baby boomers increasing demand for admissions

Question 17

Which of the following is not a component of the Value Net?

Accepted Answer

A)  Suppliers 
B)  Customers 
C)  Competitors 
D)  Supplementors 
E)  Complementors 
A)  Suppliers 
B)  Customers 
C)  Competitors 
D)  Supplementors 
E)  Complementors

Question 18

Which of the following trends or methods has since helped reduce the pricing rivalry that had intensified by the late 1990s?

Accepted Answer

A)  Patients began accepting MCOs with "narrow networks" and MCOs had the upper hand in negotiating with hospitals for inclusion in networks 
B)  Hospitals removed brand identities 
C)  Hospitals dropped "centers of excellence" from their hospitals 
D)  Hospitals consolidating away from related products 
E)  Hospitals consolidated (conducted mergers) 
A)  Patients began accepting MCOs with "narrow networks" and MCOs had the upper hand in negotiating with hospitals for inclusion in networks 
B)  Hospitals removed brand identities 
C)  Hospitals dropped "centers of excellence" from their hospitals 
D)  Hospitals consolidating away from related products 
E)  Hospitals consolidated (conducted mergers)

Question 19

Which of the following is not a way teams "collude" within professional sports markets?

Accepted Answer

A)  Agreeing on ticket prices 
B)  Agreeing on rules and schedules 
C)  Employing the same pool of referees 
D)  Sharing national broadcast revenues 
E)  Agreeing on rookie drafts 
A)  Agreeing on ticket prices 
B)  Agreeing on rules and schedules 
C)  Employing the same pool of referees 
D)  Sharing national broadcast revenues 
E)  Agreeing on rookie drafts

Question 20

Why are suppliers in a competitive upstream market said to have "indirect power"?

Accepted Answer

A)  They can sell their services to the lowest bidder 
B)  They are always concentrated 
C)  Their customers are always locked into relationships with them 
D)  The price they charge never depends on supply and demand in the upstream market 
E)  The can sell their services to the highest bidder 
A)  They can sell their services to the lowest bidder 
B)  They are always concentrated 
C)  Their customers are always locked into relationships with them 
D)  The price they charge never depends on supply and demand in the upstream market 
E)  The can sell their services to the highest bidder

Which of the following best describes the term,internal rivalry?

Which of the following factors requires the least consideration when assessing supplier power relative to the downstream industry it sells to?

In which of the following ways can entry erode incumbents' profits?

Which of the following is not a part of the five-forces framework?

Which of the following is not a feature of selective contracting (used by Managed Care Organizations)that intensified internal rivalry?

Substitutes erode profits because of which of the following factor?

Which of the following is a trend that Chicago area hospitals should least likely be worried about with respect to pricing?

Which of the following is generally thought of as a buyer in the hospital industry?

Which of the following is true about hospital industry profits from 1980 to 2000 and a five forces analysis?

Which of the following is not a potential limitation of the five-forces framework?

Which of the following is not a significant entry barrier in the commercial airframe manufacturing market?

How did European governments help Airbus aggressively pursue a 50% market share in its early years of operation?

Which of following factors should be considered when assessing complements and substitutes?

Which of the following is not a barrier to entry in professional sports markets?

Which of the following is the most likely substitute for commercial aircraft travel between Chicago and Tokyo?

Which of the following is not a factor that could intensify internal rivalry in the Chicago hospital market?

Which of the following is not a component of the Value Net?

Which of the following trends or methods has since helped reduce the pricing rivalry that had intensified by the late 1990s?

Which of the following is not a way teams "collude" within professional sports markets?

Why are suppliers in a competitive upstream market said to have "indirect power"?

The Power of Principles: an Historical Perspective

Economies of Scale and Scope

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, power, and Culture

Filters

Exam 8: Industry Analysis

Which of the following best describes the term,internal rivalry?

Which of the following factors requires the least consideration when assessing supplier power relative to the downstream industry it sells to?

In which of the following ways can entry erode incumbents' profits?

Which of the following is not a part of the five-forces framework?

Which of the following is not a feature of selective contracting (used by Managed Care Organizations)that intensified internal rivalry?

Substitutes erode profits because of which of the following factor?

Which of the following is a trend that Chicago area hospitals should least likely be worried about with respect to pricing?

Which of the following is generally thought of as a buyer in the hospital industry?

Which of the following is true about hospital industry profits from 1980 to 2000 and a five forces analysis?

Which of the following is not a potential limitation of the five-forces framework?

Which of the following is not a significant entry barrier in the commercial airframe manufacturing market?

How did European governments help Airbus aggressively pursue a 50% market share in its early years of operation?

Which of following factors should be considered when assessing complements and substitutes?

Which of the following is not a barrier to entry in professional sports markets?

Which of the following is the most likely substitute for commercial aircraft travel between Chicago and Tokyo?

Which of the following is not a factor that could intensify internal rivalry in the Chicago hospital market?

Which of the following is not a component of the Value Net?

Which of the following trends or methods has since helped reduce the pricing rivalry that had intensified by the late 1990s?

Which of the following is not a way teams "collude" within professional sports markets?

Why are suppliers in a competitive upstream market said to have "indirect power"?

The Power of Principles: an Historical Perspective

Economies of Scale and Scope

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, power, and Culture

Filters