Loose-Leaf for Crafting and Executing Strategy: Concepts and Cases: Chapter 3 Evaluating a Company's External Environment Flashcards


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PESTLE, THe Five Force Framework, and Key Success Factors
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1

A company's "macroenvironment" refers to

All the relevant forces and factors outside a company's boundaries‚éĮgeneral economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation and closer to home, the industry and competitive arena in which it operates

2

Which one of the following is not part of a company's macroenvironment?

The company's resource strengths, resource weaknesses and competitive capabilities

3

Which of the following is not a major question to ask in thinking strategically about the industry and competitive conditions in a given industry?

How many companies in the industry have good track records for revenue growth and profitability?

4

Using the five-forces model of competition to determine what competition is like in a given industry involves

Building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits

5

What makes the marketplace a competitive battlefield is

The constant jockeying of industry members to strengthen their standing with buyers and win a competitive edge over rivals

6

Rivalry among competing sellers is generally more intense when:

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.

7

The lower the user's switching costs, the:

more intense the competitive pressures posed by substitute products.

8

Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and generally are:

defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years.

9

Not all buyers of an industry's product have equal degrees of bargaining power with sellers, because:

some sellers may be less sensitive than others to price, quality, or service differences.

10

An industry contains one strategic group when all sellers:

pursue essentially identical strategies and have similar market positions.

11

Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures?

Coca-Cola as a substitute for Pepsi

12

The strength of competitive pressures that suppliers can exert on industry members is MAINLY a function of:

whether needed inputs are in short supply and whether suppliers provide differentiated input that enhances performance of the product.

13

Strategic group mapping is a visual technique for displaying:

the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors.

14

Which of the following is NOT a question asked to deduce a marketing-related key success factor?

What are the industry product R&D capabilities and expertise in product design?

15

Competitive pressures stemming from buyer bargaining power tend to be weaker in which of the following circumstances?

The investment banking industry offers highly differentiated products.

16

The task of driving-forces analysis is to:

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.

17

A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can:

shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces.

18

The "driving forces" in an industry:

are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

19

A strategic group:

is a cluster of industry members with similar competitive approaches and market positions in the market.

20

Competitive pressures associated with the threat of entry are greater in all of the following situations, EXCEPT when:

customers have low brand preferences and low degrees of loyalty to seller.

21

Which of the following factors is NOT a relevant consideration in determining the strength of buyer bargaining power?

The degree to which the seller is a manufacturer of goods and services in substantial quantities

22

The competitive pressures from substitute products tend to be stronger when:

good substitutes are readily available.

23

When an industry member is a major customer of the supplier, and the relationship (partnership) is unusually effective and mutually advantageous:

there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.

24

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of:

whether demand for supplier products is high and they are in short supply.

25

The bargaining leverage of suppliers is greater when:

the suppliers' products/services account for a small percentage of industry members' costs.

26

Rivalry among competing sellers is generally more intense when:

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.

27

The lower the user's switching costs, the:

more intense the competitive pressures posed by substitute products.

28

Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and generally are:

defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years.

29

Not all buyers of an industry's product have equal degrees of bargaining power with sellers, because:

some sellers may be less sensitive than others to price, quality, or service differences.

30

An industry contains one strategic group when all sellers:

pursue essentially identical strategies and have similar market positions.