Packet 1 – Flashcard

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A company’s “macro-environment” refers to:
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the strategically relevant factors outside a company’s industry boundaries – economic conditions, political factors, socio cultural forces, technological factors, environmental factors and legal/regulatory conditions
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Which one of the following is not party of the company’s macro-environment?
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The company’s resources strengths, resource weaknesses and competitive capabilities
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Which one of the following is part of a company’s macro-environment?
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The pace of technological change factors and legal and regulatory conditions
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Which of the following is not a factor to consider when identifying economic conditions in the macro-environment?
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The combined strength of the competitive factors influencing the firm and their implications for strategic momentum and the moves and countermoves of rivals impacted by the economy at large
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Which of the following factors represents the strategically relevant political factors in the macroenvironment that will influence the performance of all firms across the board?
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The strength of the federal banking system
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Which of the following is not a major question to ask in thinking strategiclaly about industry and competitive conditions in a given industry?
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How many companies in the industry have good track records for revenue growth and profitability?
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Thinking strategically about the industry and competitive environment involves in-depth analysis and evaluation of such consideration as:
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the market positions of industry rivals and their relative strength, and the competitive forces rivals are facing and what impact they will have on competitive intensity and industry profitability
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The most powerful and widely used tool for diagnosing the principle competitive pressures in a market is the
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Five Forces Model
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The competitive pressures on companies within an industry comes from those
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All of these
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The nature and strength of the competitive forces that prevail in an industry is generally a joint product of:
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All of these
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Which of the following is not one of the five typical sources of competitive pressures?
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The power and influence of industry driving forces
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The most powerful of the five competitive forces is usually:
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the competitive pressures associate with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry
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Typcially, the weakest of the five competitive forces in an industry is/are:
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none of these is typically the weakest
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Using the five forces model of competition to determine the character and strength of the competitive forces within a given industry involves:
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building the picture of competition in three steps 1) identify the different parties involved along with specific factors that bring about competitive pressures 2) evaluate how strong the pressures stemming from each of the 5 forces are 3) determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry
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What makes the marketplace a competitive battlefield is:
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the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals
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Market maneuvering among industry rivals
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is ongoing and dynamic, with moves and countermoves of rivals producing a continually evolving competitive landscape that delivers winners and losers
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Rivalry increases
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all of these
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factors that cause the rivalry among competing sellers to be weaker include
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rapid growth in buyer demand and high buyer switching costs
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which one of the following does not cause the rivalry among competing sellers to be weak
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rapid growth in buyer demand
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factors that tend to result in weak rivalry among competing sellers include:
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rapid growth in buyer demand, high buyer costs to switch brands, and more strongly differentiated products
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the rivalry among competing sellers tends to be less intense when
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industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance
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rivalry among competing sellers is generally more intense when
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rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share
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rivalry among competing sellers grow in intensity when:
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buyer demand is growing slowly or declining and the number of competitors is increasing and they become more equal in size and competitive capability
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the rivalry among competing firms tends to be more intense
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when demand for the product is growing slowly, buyers have low switching costs and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals
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which of the following is not among the factors that affect whether competitive rivalry among participating firms is strong, moderate or weak?
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whether the industry’s key driving forces yield firms in the industry adequate profits are strong or weak
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rivalry among competing sellers tend to be more intense when
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several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position
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the competitive battles among rival sellers striving for better market positions, higher sales and market shares and competitive advantage suggest the rivalry forces
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tends to intensify when strong companies with sizable financial resources, proven competitive capabilities and respected brand names hurdle entry barriers looking for growth opportunities and launch aggressive, well funded moves to transform into strong market contenders
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in analyzing the strength of competition among rival firms, an important consideration is
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the diversity of competitors in terms of long term direction objectives, strategies and countries of origin
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the intensity of rivalry among competing sellers does not depend on whether
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the industry has more than two strong driving forces and whether the industry has more than two diverse and capable strategic groups
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in which one of the following instances is rivalry among competing sellers not more intense?
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when there are vast numbers of small rivals so the impact of anyone company’s actions is spread thinly across all industry members
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which of the following is generally not considered a barrier to entry?
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the reaction of incumbent firms to rapid market growth
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potential entrants are more likely to be deterred from actually entering an industry when
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incumbent firms are willing and able to be aggressive in defending their market positions against entry
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competitive pressures associated with the threat of entry are greater when
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all of these conditions heighten the competitive pressures associated with fresh entry into the industry
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which one of the following does not intensify the competitive pressures associated with the threat of entry
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when industry members are struggling to earn good profits
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which one of the following increases the competitive pressures associated with the threat of entry
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when new entrants can expect to earn attractive profits
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the competitive threat that outsiders will enter a market is weaker when
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financially strong incumbents send strong signals that they launch strategic initiatives to combat the entry of newcomers
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competitive pressures stemming from the threat of entry are weaker when
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the industry outlook is risky or uncertain
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the best test of whether potential entry is a strong or weak competitive force is
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to ask if the industry’s growth and profit prospects are strongly attractive to potential entry candidates
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which of the following is not a good example of a substitute product that triggers stronger competitive pressures
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coca cola as a substitue for pepsi
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in which of the following instances are industry members not subject to stronger competitive pressures from substitute products
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buyers are dubious about using substitutes
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industry rivals tend to experience weak competitive pressures from substitute products when
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buyers incur high costs in switching to substitutes are higher priced relative to to the quality
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just how strong the competitive pressures are from susbtitute products depends on
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whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes
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to determine how strong the threat of substitutes will be entails
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identifying the relative price/performance relationship of the substitutes, the switching costs and the overall buyer demand for the substitute
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the lower the price of product substitutes, the higher the quality and performance and the lower the user’s switching costs the
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more intense the competitive pressures posed by substitute prodcuts
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whether supplier seller relationships in an industry represent a strong or weak source of competitive pressure is a function of
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whether demand for supplier products is high and they are in short supply
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the strength of competitive pressures that suppliers can exert on industry members is mainly a function of
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whether needed inputs are in short supply and whether suppliers provide differentiated input that enhances performance of the product
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the bargaining leverage of suppliers is greater when
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there suppliers products/services account for a small percentage of industry members costs
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in which one of the following instances are the competitive pressures stemming from supplier bargaining power not weakened?
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when the items purchased from suppliers are in short supply
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supplier bargaining power is weaker when
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good substitutes for supplier products/services exists
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which one of the following is not a factor that affects the strength of supplier bargaining power
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whether industry members are struggling to make good profits because of slow growing market demand
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which one of the following is not a factor in causing supplier bargaining power to be stronger
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the item being supplied is a commodity
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when an industry member is a major customer of the supplier, and the relationship (partnership) is unusually effective and mutually advantageous
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there is a high likelihood of such partnerships reducing competitive pressures on all industry members, provided technological change in the suppliers business is rapid and the item being supplied is a commodity
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the higher the switching costs for industry members, the more it can
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limit supplier bargaining power
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whether buyer seller relationships in an industry represent a strong or weak source of competitive pressure is a function of
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the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships certain industry members can adversely affect other industry members
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whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on:
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whether demand supply conditions represent a buyers market or a sellers markt
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which of the following is not a factor that causes buyer bargaining power to be stronger
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buyers are small and numerous relative to sellers
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buyer bargaining power is stronger when
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the industry’s products are standardized or undifferentiated
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which of the following factors in not a relevant consideration in determining the strength of buyer bargaining power
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the degree to which the seller is a manufacturer of goods and services in substantial quantities
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collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when
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sales are made to buyer groups with either strong bargaining power or high senstivity
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in which of the following circumstances are competitive pressures associated with the bargaining power of buyers not relatively strong
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when buyer demand is growing rapidly
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competitive pressures stemming from buyer bargaining power tend to be weaker when
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the costs incurred by buyers in switching to competing brands or to substitute products are relatively high
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which of the following conditions acts to weaken buyer bargaining power?
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when buyers are unlikely to integrate backward into the business of sellers
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buyers are in position to exert strong bargaining power in dealing with sellers when
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buyers are price sensitive due to the product representing a significant fraction of their purchases
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which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak
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whether buyer needs and expectations are changing rapidly or slowly
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not all buyers of an industry’s product have equal degrees of bargaining power with sellers, because
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some sellers may be less sensitive than others to price, quality or service differences
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a competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on he part of both suppliers and customers
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is conducive to industry members earning attractive profits
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a competitive envrionment where there is a strong rivalry among sellers, low entry barriers, strong competition from substitute products and considerable bargaining leverage on the part of both suppliers and customers
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is competitively unattractive from the standpoint of earning good profits
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as a rule, the collective impact of competitive pressures associated with the five competitive forces
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determines the extent of the competitive pressure on industry profitability
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a company’s strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can
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shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces
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the driving forces in an industry
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are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions
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industry conditions change
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because important forces are enticing or pressuring certain industry participants to alter their actions in important ways
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the task of driving forces analysis is to
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identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces
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driving forces analysis
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involves identifying the driving forces, assessing whether the impact will make the industry more or less attractive and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces
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which of the following is not generally a driving force captable of producing fundamental changes in industry and competitive conditions?
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movement in the economy and in interest rates
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which of the following are more unlikely to qualify as driving forces
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changes in the long term industry growth rate, the entry or exit of major firms and changes in cost and efficiency
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which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions
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changes in the economic power and bargaining leverage of customers and suppliers, growing supplier seller collaboration and growing buyer seller collaboration
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which of the following is most likely to qualify as a driving force
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successful introduction of innovative new products or new ways to market products
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which one of the following is not a common type of driving force
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increasing efforts to collaborate closely with suppliers
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increasing globalization of the industry can be a driving force because
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companies need to spread their operating reach into more and more country markets to meet consumer demand and take advantage of available operating activities
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driving forces analysis helps managers identify whether
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the collective impact of the driving forces will act to increase/decrease market demand, increase/decrease competition and raise/lower industry profitability in the years ahead
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evaluating the industry’s driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and
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generally are definied in ways that will strengthen or weaken market demand, competition, and industry profitability in future years
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in analyzing driving forces, the strategists role is to
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identify the driving forces and evaluate their impact on 1) demand for the industry’s product 2)the intensity of competition 3) industry profitablity
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which one of the following is not an integral part of driving forces analysis?
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determining whether forces are acting to cause industry rivals to shift to a different strategic group
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the real payoff of driving forces is to help managers understand
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what strategy changes are needed to prepare for the impacts of the driving forces
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driving forces analysis
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has practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare or the changes ahead
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what is the best technique for revealing the different market or competitive position that rival firms occupy in the industry
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strategic group mapping
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a strategic group
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is a cluster of industry members with similar competitive approaches and market positions in the market
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an industry contains one strategic group when all sellers
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pursue essentially identical strategies and have similar market positions
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strategic group mapping is a visual technique for displaying
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the different market or competitive positions that rival firms occupy in an industry and for identifying each rivals closest competitors
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which one of the following pairs of variables are least likely to be useful in drawing a strategic group map
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level of profitability and size of market share
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the concept of strategic groups is relevant to industry and competitive analysis because
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strategic group maps help identify how each competing firm is positioned and the relationship to their closes competitors
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in maping strategic groups
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the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry
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which of the following is not an appropiate guideline for developing a strategic group map for a given industry
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the variables chosen as axes for the map should be highly correlated
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with the aid of a strategic group map, one can
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reveal which companies are close competitors and which are distant rivals and that not all positions on the map are equally attractive
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one of the things that can be gleaned from a strategic group map of industry rivals is
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that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces
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strategic group mapping analysis does not entail drawing conclusions about
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where on the map is the easiest position to shift from to a more favorably situated position
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the payoff of good scouting reports on rivals is an improved ability to
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anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketpalce
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having good competitive intelligence about rivals strategies and moves to improve their situation is important because
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it allows a company to anticipate what moves rivals are likely to make next and to craft is its own strategic moves with some confidence about what market maneuvers to expect from its rivals
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good competitive intelligence about the strategic direction and likely moves of key competitors allows a company to determine
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all of these
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to succeed in predicting the next strategic moves and countermoves of close or key rivals, it is useful to consider such indicators as
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a rivals current strategy, objectives, capabilities and assumptions about itself and the industry
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a rivals strategic moves and countermoves are both
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enabled and constrained by the set of capabilities they have at hand and thus serve as a strong signal of future strategic actions
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the extent to which firms are meeting objectives suggests they
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are likely to continue their present strategy with only minor fine tuning
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information regarding the four components of the framework for competitor analysis can not
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gathered from rivals internal proprietary strategic information
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the key sucess factors in an industry
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are those competitive factors that most affect industry members abilities to prosper in the marketplace — the particular strategy elements, product attributes, operational approaches, resources and competitive capabilities that spell the difference between being a strong competitor and a weak one and between profit and loss
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an industry’s key success factors can always be deduced by asking what factors
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such as product attributes and service characteristics are crucial and what resources and competitive capabilities are needed and what shortcomings are evident to put a company at a competitive disadvantage
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in identifying an industry’s key success factors, strategists should
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consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be combatively successful and what share coming are almost certain to put a company at a significant competitive disadvantage
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which of the following is not a question asked to deduce a marketing related key success factor
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what are the industry product R&D capabilities and expertise in product design
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which of the following can aid industries in identifying key success factors
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crucial product attributes and service characteristics
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correctly diagnosing an industry’s key success factors
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raises a company’s chances of crafting a sound strategy
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which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity?
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the industry’s growth potential, whether competition appears destined to become stronger or weaker, and whether the industry’s overall profit prospects are about aver, average or below average
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in evaluating whether the industry and competitive environment presents sufficiently attractive prospects for both compeititve success and attractive profits usually does not involve a consideration of which of the following factors?
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whether the industry’s product is strongly or weakly differentiated
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when evaluating whether an industry’s environment presents a company with an above average profitability and an attractive business opportunity it primarily involves
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determining the industry outlook for future profitability

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