Question 1

Shelly Brunner owns a sports themed restaurant which is located in an upscale business district in Chicago. One advantage that Shelly has is that she bought the lot she built her restaurant on 25 years ago when lots in the area were selling for $50,000. Shelly knows that several potential competitors have looked at bare lots near his business but haven't been willing to pay the asking prices, which are as high as $500,000. Which of the six major sources of barriers to entry is causing a disincentive for new firms to enter Shelly's industry?

Accepted Answer

A)   capital requirements
B)   economies of scale
C)   product differentiation
D)   government and legal barriers
E)   cost advantage independent of size E

Question 2

Discuss the nontraditional barriers to entry identified in the chapter. Why is it important that entrepreneurial firms utilize one or more of these forms of barriers to entry?

Accepted Answer

The nontraditional barriers to entry,which are particularly suitable for entrepreneurial firms,are strength of management team,first-mover advantage,passion of management team and employees,unique business mode,a unique Internet domain name,and inventing a new approach to an industry and executing the idea in an exemplary fashion.It is important that startup utilize one or more of these forms of barriers to entry because many of the traditional barriers to entry,like economies of scale,are expensive.It is difficult for startups to erect expensive barriers to entry because money is usually tight.

Question 3

According to the textbook, the three different types of competitors a business will face are:

Accepted Answer

A)   potential, direct, and upcoming
B)   indirect, fleeting, and future
C)   serious, cautious, and future
D)   direct, indirect, and future
E)   potential, fleeting, and indirect D

Question 4

What is an emerging industry? What is the primary opportunity available to entrepreneurial firms in emerging industries?

Accepted Answer

The answer of What is an emerging industry? What is...

Question 5

The two most common strategies pursued by firms in global industries are the ________ strategy and the ________ strategy.

Accepted Answer

A)   inclusive, multidomestic
B)   multidomestic, global
C)   multidomestic, worldwide
D)   inclusive, global
E)   home, worldwide

Question 6

What is industry analysis? Why is it important for a new venture to complete a thorough analysis of the industry it is entering?

Accepted Answer

The answer of What is industry analysis? Why is it...

Question 7

If the buyers are concentrated and they buy from a large number of suppliers, then the bargaining power of buyers is increased.

Accepted Answer

A) True 
 B)False

Question 8

An emerging industry is a new industry in which standard operating procedures have yet to be developed.

Accepted Answer

A) True 
 B)False

Question 9

The information that is gathered by a firm to learn about its competitors is referred to as a:

Accepted Answer

A)   feasibility appraisal
B)   workable appraisal
C)   practical assessment
D)   viable assessment
E)   competitive intelligence

Question 10

A ________ industry is one that is characterized by a large number of firms of approximately equal size.

Accepted Answer

A)   fragmented
B)   mature
C)   declining
D)   emerging
E)   global

Question 11

If a start-up pioneers an industry or a new concept within an industry, the name recognition the start-up establishes may create a formidable nontraditional barrier to entry referred to as a:

Accepted Answer

A)   unique business model
B)   aggressive supremacy
C)   competitive superiority
D)   first-mover advantage
E)   aggressive tactical advantage

Question 12

Aquafina operates in the bottled water industry. The companies that offer identical or similar products and go after the same customers that Aquafina does are Dasani and Zephyrhills. Dasani and Zephyrhills are Aquafina's:

Accepted Answer

A)   direct competitors
B)   indirect competitors
C)   future competitors
D)   impending competitors
E)   potential competitors

Question 13

According to the example provided in Chapter 5, www.1800contacts.com possesses a nontraditional barrier to entry referred to as:

Accepted Answer

A)   unique business model
B)   strength of management team
C)   access to distribution channels
D)   Internet domain name
E)   first-mover advantage

Question 14

Opportunities for leadership, niche, harvest and divestment are associated with ________ industries.

Accepted Answer

A)   mature
B)   emerging
C)   declining
D)   fragmented
E)   global

Question 15

Once a firm decides to enter an industry and chooses a market in which to compete, it must gain an understanding of its competitive environment. This challenge can be undertaken by completing a:

Accepted Answer

A)   business analysis
B)   industry analysis
C)   competitor analysis
D)   strategic analysis
E)   market analysis

Question 16

The best industry to enter is an industry where the threat of each of Porter's five forces is high.

Accepted Answer

A) True 
 B)False

Question 17

According to the textbook, the five competitive forces included in five-forces model determine:

Accepted Answer

A)   the average rate of new business starts in an industry
B)   the average growth rate for the firms in an industry
C)   the average rate of return for the firms in an industry
D)   the average sales for the firms in an industry
E)   the average failure rate for the firms in an industry

Question 18

Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important:

Accepted Answer

A)   environmental trend
B)   business trend
C)   commerce trend
D)   statutory trend
E)   competitive trend

Question 19

Which of Porter's Five-Forces is most directly influenced by the following factors: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?

Accepted Answer

A)   threat of new entrants
B)   rivalry among existing firms
C)   threat of substitutes
D)   bargaining power of buyers
E)   bargaining power of suppliers

Question 20

A(n) ________ is a group of firms producing a similar product or service, such as soft drinks, electronic games, or computers.

Accepted Answer

A)   cluster
B)   division
C)   sector
D)   industry
E)   network

Exam 5: Industry and Competitor Analysis

Discuss the nontraditional barriers to entry identified in the chapter. Why is it important that entrepreneurial firms utilize one or more of these forms of barriers to entry?

According to the textbook, the three different types of competitors a business will face are:

What is an emerging industry? What is the primary opportunity available to entrepreneurial firms in emerging industries?

The two most common strategies pursued by firms in global industries are the strategy and the strategy.

What is industry analysis? Why is it important for a new venture to complete a thorough analysis of the industry it is entering?

If the buyers are concentrated and they buy from a large number of suppliers, then the bargaining power of buyers is increased.

An emerging industry is a new industry in which standard operating procedures have yet to be developed.

The information that is gathered by a firm to learn about its competitors is referred to as a:

A ________ industry is one that is characterized by a large number of firms of approximately equal size.

If a start-up pioneers an industry or a new concept within an industry, the name recognition the start-up establishes may create a formidable nontraditional barrier to entry referred to as a:

Aquafina operates in the bottled water industry. The companies that offer identical or similar products and go after the same customers that Aquafina does are Dasani and Zephyrhills. Dasani and Zephyrhills are Aquafina's:

According to the example provided in Chapter 5, www.1800contacts.com possesses a nontraditional barrier to entry referred to as:

Opportunities for leadership, niche, harvest and divestment are associated with ________ industries.

Once a firm decides to enter an industry and chooses a market in which to compete, it must gain an understanding of its competitive environment. This challenge can be undertaken by completing a:

The best industry to enter is an industry where the threat of each of Porter's five forces is high.

According to the textbook, the five competitive forces included in five-forces model determine:

Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important:

Which of Porter's Five-Forces is most directly influenced by the following factors: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?

A(n) ________ is a group of firms producing a similar product or service, such as soft drinks, electronic games, or computers.