Question 1

1. Which of the following identifies the main difference between an opportunity and a threat for a company's environment?

a. Opportunities open a company up for risks to their profitability while threats allow for implementation of strategies which can increase profitability.

b. Opportunities provide a company the freedom to take advantage of conditions in the environment while threats can mean peril for a company's integrity and profitability.

c. Opportunities arise in the external environment while threats primarily play out in the internal environment of a company.

d. The only difference between an opportunity and a threat is whether a company decides to pursue new strategies or to stick with proven strategies as a result of the new element or condition.

e. Opportunities generally relate to the increased competition provided by new arrivals to the industry and threats are focused on the exiting of competitors in the industry.

Question 2

1. Which of the following is a difference between the bargaining power of buyers and the bargaining power of suppliers?

a. Buyers bargaining power can raise costs by demanding better quality, while suppliers can raise costs by providing lower quality products.

b. Only suppliers have the ability to make demands based on their power relative to that of the company.

c. A powerful buyer lower costs, while suppliers raise costs to squeeze profits out of an industry.

d. The potential of a supplier with strong bargaining power is considered a threat, while a buyer with strong bargaining power does not pose a threat to the industry.

e. Buyers have the most bargaining power in a monopoly, while suppliers need multiple product substitutes to have bargaining power.

Question 3

1. Which of the following is currently an embryonic industry?

a. Personal computers

b. Nanotechnology

c. Biotechnology

d. Wireless communications

e. Internet retailing

Question 4

As a barrier to new entry, absolute cost advantages can be based on:

a. superior production operations and processes due to accumulated experience, patents, or trade secrets.

b. high product quality, service-oriented innovations, and good after-sales service.

c. the unique ability of established companies to spread fixed costs over a large volume.

d. cost reductions that arise from the mass production of standardized output.

e. continuous advertising of brand and company names, and product innovation achieved through research and development.

Question 5

1. In the late 1800s, when the automobile was first manufactured, the automobile industry would have been considered which of the followingindustries?

a. Declining

b. Mature

c. Embryonic

d. Shakeout

e. Growth

Question 6

1. Mobility barriers:

a. exclude the barriers to entry into a group and the barriers to exit from a company's existing strategic group.

b. inhibit the movement of companies between strategic groups in an industry.

c. allow industries to change their strategy and compete in an alternate strategic group.

d. are factors that operate outside of an industry.

e. inhibit companies from shifting between suppliers for raw materials.

Question 7

1. When shopping for clothing such as shirts and jeans, Tyrone only buys products from Eastern Clothing Company even if there are several other companies that offer similar products at lower prices. Tyrone's preference for Eastern Clothing Company demonstrates:

a. lack of economies of scale

b. risk of entry.

c. lack of demand.

d. bargaining power.

e. brand loyalty.

Question 8

1. An impact that the changing industry boundaries have had is that:

a. there is an increase in the number of competitors within an industry.

b. owners of companies can now define boundaries.

c. the number of product substitutes available for customers has reduced.

d. the pattern of customer needs does not affect companies anymore.

e. technological changes do not affect companies anymore.

Question 9:

1. Which of the following is NOT considered a benefit of industry analysis?

a. It stimulates systematic thinking about strategic choices.

b. It can be a powerful tool to aid in a manager's strategic thinking.

c. It makes it easier to identify opportunities and threats within an industry.

d. It can result in profitable changes to existing strategies.

e. It recognizes how competitive forces are isolated and do not impact each other.

Question 10

1. If economies of scale are an industry's primary entry barrier, a new entrant's major concern is:

a. its inability to match the innovation of the established firm.

b. its inability to get buyers to switch to its product.

c. its inability to produce in sufficient volume to match the cost advantages of established producers.

d. the inferior quality of its products.

e. its inability to counter brand loyalty that customers have for established companies in the industry.

Question 11

1. As an industry enters the shakeout stage:

a. rivalry among companies declines.

b. excess productive capacity emerges.

c. new entrants come into the market.

d. demand grows at a high rate.

e. prices of products increase.

Question 12

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

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 industry is not an important customer to the suppliers.

e. the product that suppliers sell has many substitutes and is not vital to the companies.

Question 13

1. An industry's buyers have high bargaining power when:

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

1. Which of the following is NOT an implication that strategic groups must address when considering threats and opportunities?

a. Threats to profitability come from rivals within the strategic group.

b. The strength of competitive forces facing strategic groups is a result of the competitive positioning approach chosen by the group.

c. Competition comes on two fronts, from those within the strategic group as well as those in other strategic groups within the industry.

d. Customers see the products of those in a strategic group as substitutes for on another.

e. Different strategic groups have distinctive and varied relationships with each of the identified competitive forces.

Question 15

1. What makes up the competitive structure of an industry?

a. The quality of products produced

b. The number and size distribution of companies

c. Market segments

d. The number of consumers

e. The number of manufacturing plants

Question 16

1. Which of the following is a benefit of innovation in an industry?

a. It secures the profitability of strategic groups within an industry.

b. It emphasizes the importance of industry structure.

c. It breaks the life cycle pattern and causes growth so rapid it causes stages to be skipped altogether.

d. It increases the barriers to entry to reduce rivalry and competition.

e. It allows smaller companies the ability to compete with large, established companies by reducing entry barriers and lowering fixed costs of production.

Question 17

1. Which of the following costs 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?

a. Overhead

b. Incremental

c. Marginal

d. Opportunity

e. Switching

Question 18

1. A group of firms manufactures writing implements such as pens, pencils, and markers. This group should be referred to as a(n):

a. industry.

b. regulator.

c. market segment.

d. service provider.

e. substitute.

Question 19

1. Which of the following is NOT one of the macroeconomic forces?

a. Inflation rates

b. Growth rate of the economy

c. Interest rates

d. Cultural changes

e. Currency exchange rates

Question 20

1. Due to a recent relaxation in the pollution control laws by the government, Alpha Motors has reduced the production of its electric-powered cars. The company is responding to a change in which of the following macroenvironmental forces?

a. Social

b. Global

c. Demographic

d. Political and legal

e. Macroeconomic