Question 1

In an industry,the threat of entry is high when

Accepted Answer

A)   capital requirements are low.
B)   expected returns are high.
C)   technological know-how is industry specific.
D)   switching costs are high.E) A) and D)
F) None of the above

Question 2

Which of the following is most likely an implication of new firms entering an industry?

Accepted Answer

A)   The bargaining power of buyers will reduce.
B)   The industry's overall profit potential and sales will increase.
C)   The rivalry among existing competitors will reduce.
D)   The incumbent firms will spend more to satisfy their existing customers.E) A) and B)
F) A) and C)

Question 3

Which of the following fundamental insights was provided by Porter's five forces framework from the completion of the Alta Velocidad Española (AVE) in 2008?

Accepted Answer

A)   A strong threat of substitutes decreases the rivalry among existing competitors.
B)   All the five forces must work together to have a meaningful impact.
C)   Any of the five forces on its own, if sufficiently strong, can extract industry profitability.
D)   Competition must be defined more narrowly to remain confined to the industry's closest competitors.E) A) and B)
F) B) and C)

Question 4

Clear Calls Inc.,a telephone service provider,has a large user base mainly because phone calls and messages between all Clear Calls users are free.When a person switches to a Clear Calls network,his or her entire network of family and friends is likely to switch to the same network to avail the benefit of free calls and messages.In addition,an existing user who gets a new user to register with Clear Calls Inc.is given a free wireless connection.This has helped to keep competition away from Clear Calls.In this scenario,which of the following factors is acting as an entry barrier for Clear Calls Inc.?

Accepted Answer

A)   economies of scale
B)   high capital requirement
C)   network effects
D)   high fixed costsE) B) and C)
F) All of the above

Question 5

Which of the following statements is true about strategic groups?

Accepted Answer

A)   It is not possible to have two different strategic groups within the same industry.
B)   Rivalry within the same strategic group tends to be lower than rivalry between different strategic groups.
C)   Profitability varies between different strategic groups.
D)   Companies within the same strategic group are complementors to each other.E) B) and C)
F) B) and D)

Question 6

The telecommunication industry of United Canava is primarily dominated by three large firms: AD Telecom Inc.,Mystic Telecom Corp.,and Total Talk Inc.Instead of cutting prices competitively,these firms have resorted to non-price competition through branding and product differentiation.Which of the following industry competitive structures are these companies most likely in?

Accepted Answer

A)   monopoly
B)   perfect competition
C)   monopolistic competition
D)   oligopolyE) A) and B)
F) A) and C)

Question 7

In Rozinia Republic,the federal government owns and manages all the nuclear power plants.This is because the business would not be profitable if there was more than one supplier in the nuclear power industry.Which of the following industry competitive structures does the scenario best illustrate?

Accepted Answer

A)   monopolistic competition
B)   oligopoly
C)   natural monopoly
D)   perfect competitionE) A) and B)
F) A) and C)

Question 8

How did Virgin America enter the airline industry despite the industry's notoriously low profitability?

Accepted Answer

A)   Virgin America offered average-cost service between small and large metropolitan cities in the American West.
B)   Virgin America offered average-cost service between major metropolitan cities along the American East Coast.
C)   Virgin America offered low-cost service between small and large metropolitan cities in the American South.
D)   Virgin America offered low-cost service between major metropolitan cities on the American East and West coasts.E) None of the above
F) A) and B)

Question 9

Which of the following statements about Porter's five forces model is accurate?

Accepted Answer

A)   The potential profit of a company is caused mostly by random factors instead of by industry-specific factors.
B)   Competition must be defined narrowly to focus on the closest competitors and plan ways increase profit potential.
C)   Competition must be defined in a broad way to incorporate all of the key factors that influence profit potential.
D)   The potential profit of a company is caused by two forces: threat of substitutes and rivalry among existing firms.E) A) and B)
F) A) and C)

Question 10

With the emergence of smartphones,users no longer have to carry a separate music player,a video game,a laptop,or a magazine to keep themselves entertained when traveling.A smartphone is loaded with a variety of applications to satisfy all the customer needs that different industries or products individually satisfied earlier.As a result,the smartphone industry has been posing a threat to a lot of other unrelated industries.What is this phenomenon best known as?

Accepted Answer

A)   industry convergence
B)   backward integration
C)   product differentiation
D)   customer myopiaE) A) and B)
F) A) and C)

Exam 3: External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Correct Answer
verified

In Rozinia Republic,the federal government owns and manages all the nuclear power plants.This is because the business would not be profitable if there was more than one supplier in the nuclear power industry.Which of the following industry competitive structures does the scenario best illustrate?

Correct Answer
verified

In an industry,the threat of entry is high when

Correct Answer
verified

How did Virgin America enter the airline industry despite the industry's notoriously low profitability?

Correct Answer
verified

Which of the following is most likely an implication of new firms entering an industry?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Which of the following fundamental insights was provided by Porter's five forces framework from the completion of the Alta Velocidad Española (AVE) in 2008?

Correct Answer
verified

Which of the following statements is true about strategic groups?

Correct Answer
verified

Which of the following statements about Porter's five forces model is accurate?

Correct Answer
verified

Exam 3: External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Correct AnswerverifiedShow Answer

In Rozinia Republic,the federal government owns and manages all the nuclear power plants.This is because the business would not be profitable if there was more than one supplier in the nuclear power industry.Which of the following industry competitive structures does the scenario best illustrate?

Correct AnswerverifiedShow Answer

In an industry,the threat of entry is high when

Correct AnswerverifiedShow Answer

How did Virgin America enter the airline industry despite the industry's notoriously low profitability?

Correct AnswerverifiedShow Answer

Which of the following is most likely an implication of new firms entering an industry?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following fundamental insights was provided by Porter's five forces framework from the completion of the Alta Velocidad Española (AVE) in 2008?

Correct AnswerverifiedShow Answer

Which of the following statements is true about strategic groups?

Correct AnswerverifiedShow Answer

Which of the following statements about Porter's five forces model is accurate?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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