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How is a firm's task environment different from its general environment?


A) Managers have some influence over external factors in the task environment; they have little direct effect over external forces in the general environment.
B) Managers have no direct effect over external factors in the task environment; they have some influence over external forces in the general environment.
C) Managers have no direct effect over external factors in the task environment; they have influence over all external forces in the general environment.
D) Managers have influence over all external factors in the task environment; they have no direct effect over external forces in the general environment.

E) B) and C)
F) All of the above

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In the _____ developed by Michael Porter,competition is not defined narrowly as a firm's closest competitors but rather more broadly to include other factors in an industry like buyers,suppliers,potential new entry of other firms,and the threat of substitutes.


A) PESTEL framework
B) VRIO framework
C) five forces model
D) value chain analysis

E) None of the above
F) All of the above

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Soapsuds Inc.,a manufacturer of cleaning agents,supplies its products to All Needs Inc.,a supermarket chain.It demands that All Needs create more shelf space in its stores for Soapsuds' products.However,All Needs Inc.refuses to do this.Instead,it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario,All Needs Inc.has exercised its bargaining power as a buyer through


A) forward integration.
B) product differentiation.
C) crowdsourcing.
D) backward integration.

E) None of the above
F) B) and D)

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Which of the following is a characteristic of a fragmented industry?


A) The entry barriers are high.
B) There are many small firms.
C) Firms tend to have high profitability.
D) Firms have substantial pricing power.

E) A) and B)
F) A) and C)

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When applying the five forces model,the first step should ideally be


A) drawing a strategic-group map.
B) identify the underlying drivers of each force.
C) assessing the overall industry structure.
D) defining the relevant industry.

E) A) and B)
F) A) and C)

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Why do companies use strategic group models?


A) to reveal product differences between firms in the same industry
B) to reveal potential areas of industry convergence between firms in different industries
C) to reveal common threads between firms in different industries
D) to reveal performance differences between clusters of firms in the same industry

E) A) and B)
F) A) and C)

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When fashion magazines face competition from fashion blogs on the web,which of the following forces in Michael Porter's five forces model primarily gets stronger?


A) the emergence of entry barriers
B) the bargaining power of suppliers
C) the availability of complements
D) the threat of substitutes

E) A) and C)
F) A) and B)

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Given the industry structure in the automobile business,entering the auto manufacturing industry doesn't seem advisable.Yet Tesla Motors is joining the fray.Rather than attempting to compete head-on in internal combustion engines,Tesla Motors is entering the all-electric car segment,a much less crowded niche in the overall car industry.Which of the following is Tesla most hoping to benefit from in this market niche?


A) network effects
B) economies of scale
C) customer switching costs
D) capital requirements

E) None of the above
F) A) and D)

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In an industry,the rivalry among existing competitors is high when


A) fixed costs are low and marginal costs are high.
B) exit barriers are low.
C) incumbent firms are highly committed to the business.
D) industry growth is high.

E) B) and D)
F) A) and B)

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_____ are best described as industry-specific factors that separate one strategic group from another.


A) Mobility barriers
B) Excise duties
C) Embargoes
D) Learning effects

E) A) and B)
F) A) and C)

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The Beacon is a newspaper that sold print copies of its paper in a medium-sized town in Kansas for more than 100 years.Recently,the Beacon signed a deal with IntelNews Inc.to present the paper digitally to homes and businesses.This example shows


A) a monopoly.
B) an oligarchy.
C) monopolistic competition.
D) an industry convergence.

E) All of the above
F) None of the above

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Which of the following is the best characterization of sociocultural forces?


A) a firm's culture, norms, and values
B) a society's culture, norms, and values
C) a competitor's culture, norms, and values
D) a focus group's culture, norms, and values

E) B) and D)
F) A) and D)

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In which of the following industry competitive structures do selling firms have the lowest pricing power?


A) monopolistic competition
B) monopoly
C) oligopoly
D) perfect competition

E) B) and C)
F) A) and B)

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When companies that manufacture shipping containers want to buy iron ore,the purchase decision is solely based on price.This is because there are a large number of sellers in the iron ore industry,and iron ore is a highly undifferentiated commodity.Which of the following industry competitive structures does the iron ore industry best illustrate?


A) monopoly
B) oligopoly
C) perfect competition
D) monopolistic competition

E) None of the above
F) All of the above

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Which of the following statements with regard to industry structures is true?


A) They are stable over time, not dynamic.
B) Having a large number of competitors generally equates to higher industry profitability.
C) A consolidated industry tends to be more profitable than a fragmented one.
D) Having few but large competitors increases the threat of strong competitive forces such as supplier or buyer power.

E) A) and B)
F) B) and C)

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Which of the following do the sociocultural forces in a firm's external environment best represent?


A) the interest rates prevalent in an economy
B) the laws protecting small enterprises in a nation
C) the family size of the firm's target market
D) the rate of employee attrition within the firm

E) C) and D)
F) B) and C)

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During periods of high industry growth


A) price competition among firms frequently decreases.
B) rivals are focused on taking market share away from one another.
C) firms indulge in intense promotional campaigns.
D) new product releases with minor modifications become common.

E) A) and C)
F) B) and D)

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Which of the following is a primary feature of the five forces model?


A) It is concerned exclusively about the intensity of rivalry among direct competitors.
B) It takes into account a firm's internal resources, capabilities, and core competencies.
C) It helps managers determine the changing speed of an industry or the rate of innovation.
D) It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.

E) A) and B)
F) B) and D)

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While implementing strategic group mapping for the U.S.domestic airline industry,two strategic groups become apparent: low-cost,point-to-point airlines (Virgin Atlantic,Alaska Airlines,JetBlue,and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American,Delta,and United) .Which of the following statements is true about these two strategic groups?


A) Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines.
B) American, United, and Delta Airlines will be affected differently by Porter's five competitive forces.
C) Alaska Airlines and Delta Airlines will be affected by the external environment in very similar ways.
D) Competitive rivalry between Virgin Atlantic and Delta Airlines is likely to be higher than that between American, Delta, and United.

E) A) and B)
F) A) and C)

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In the step-by-step process of industry analysis,identifying the underlying drivers of each force is followed by


A) drawing a strategicgroup map.
B) assessing the overall industry structure.
C) identifying key players in each of the five forces.
D) defining the relevant industry.

E) A) and D)
F) C) and D)

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