Exam 6: Industry Analysis

The pharmaceutical industry has to be concerned about the competition from generic versions of their drugs during the first 5 years after the release of a new drug.

One way of maintaining growth when domestic markets have become saturated is to expand into markets overseas.

Companies that do not have a differentiated product and compete on price are probably in purely competitive industries.

One of the strongest predictable events for the future growth of pharmaceutical companies is the:

The impact of intense rivalry within industries is similar to the threat of new entrants.

Competition can be intense in oligopolies due to price wars and international competition.

The S&P 500 Index and Gross Domestic Product (GDP) seem to have similar long-term growth paths.

Investors usually anticipate movements in the economy before they actually happen.

One way some U.S. companies have increased sales growth is by:

Industries in the decline stage suffer from shrinking sales because product innovation has not increased the product base over the years.

Rotational investors study the business cycle, and invest in companies that are likely to benefit from the predicted movements of the economy.

Firms in the development stage finance their growth from internal cash flows.

Companies that have a strong ability to control suppliers enjoy a competitive advantage.

In which stage in the industry life cycle are companies likely to be privately owned?

Growth rates are highest in which of the industry life cycle stages?

Companies with consistently high returns on equity usually are highly leveraged to take advantage of the large profit margins.

Which of the following industries is a good example of an industry in the maturity stage?

Why would an investor want to use the rotational investing method?

A frequent source of capital for profitable Stage I companies is venture capitalists.

The crossover point on the life cycle curve is the point where: