Ch. 3 Multiple Choice Flashcards


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1

A company's "macroenvironment" refers to

C. All the relevant forces and factors outside a company's boundaries⎯general 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?

E. 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 industry and competitive conditions in a given industry?

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

4

Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as
Refer To: 03-03

E. All of the above

5

Which of the following is not a factor to consider in identifying an industry's dominant economic features?

D. How strong driving forces and competitive forces are

6

Which of the following is not a relevant consideration in identifying an industry's dominant economic features?

C. How many strategic groups the industry has and which ones are most profitable and least profitable

7

The state of competition in an industry is a function of

E. All of these

8

The nature and strength of the competitive forces that prevail in an industry are generally a joint product of

E. All of these

9

Which of the following is not one of the five typical sources of competitive pressures?

A. The power and influence of industry driving forces

10

The most powerful of the five competitive forces is usually

B. The competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

11

Typically, the weakest of the five competitive forces in an industry is/are:

E. None of the above is typically weakest

12

Competitive jockeying and market maneuvering among industry rivals

E. Is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another

13

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

A. 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

14

What makes the marketplace a competitive battlefield is

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

15

Factors that cause the rivalry among competing sellers to be weak include

B. Rapid growth in buyer demand and high buyer switching costs

16

Which one of the following does not cause the rivalry among competing sellers to be weak?

D. Low barriers to entry

17

Factors that tend to result in weak rivalry among competing sellers include

B. Rapid growth in buyer demand, high buyer costs to switch brands and so many industry rivals that any one company's actions have little impact on rivals' businesses

18

The rivalry among competing sellers tends to be less intense when

C. Industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance

19

Rivalry among competing sellers is generally more intense when

D. 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

20

Rivalry among competing sellers grows in intensity when

E. Buyer demand is growing slowly and the industry is composed of 6 to 10 competitors that are fairly equal in size and competitive capability

21

The rivalry among competing firms tends to be more intense

A. When demand for the product is growing slowly, one or maybe several industry members have powerful and successful competitive strategies, 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 the businesses of rivals

22

The competitive force of rival firms' jockeying for better market positions, higher sales and market shares and competitive advantage

D. Tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders

23

Which of the following is not among the factors that affect whether competitive rivalry among participating firms is strong, moderate or weak?

D. Whether industry driving forces are strong or weak

24

In analyzing the strength of competition among rival firms, an important consideration is

B. The diversity of competitors in terms of visions, strategic intents, objectives, strategies, resources and countries of origin

25

The intensity of rivalry among competing sellers does not depend on whether

A. The industry has more than two strong driving forces and whether the industry has more than 2 strategic groups

26

Rivalry among competing sellers tends to be more intense when

C. 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

27

In which one of the following instances is rivalry among competing sellers not more intense?

E. When there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members

28

Potential entrants are more likely to be deterred from actually entering an industry when

A. Incumbent firms have previously been aggressive in defending their market positions against entry

29

Competitive pressures associated with the threat of entry are greater when

E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry

30

Which one of the following does not intensify the competitive pressures associated with the threat of entry?

B. When industry members are struggling to earn good profits

31

Which one of the following increases the competitive pressures associated with the threat of entry?

E. When newcomers can expect to earn attractive profits

32

The competitive threat that outsiders will enter a market is weaker when

A. Financially strong industry members send strong signals that they will launch strategic initiatives to combat the entry of newcomers

33

Competitive pressures stemming from the threat of entry are weaker when

C. The industry outlook is risky or uncertain

34

Which of the following is generally not considered as a barrier to entry?

A. Rapid market growth

35

The best test of whether potential entry is a strong or weak competitive force is

E. To ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates

36

The competitive pressures from substitute products tend to be stronger when

A. Buyers are relatively comfortable with using substitutes and the costs to buyers of switching over to the substitutes are low

37

In which of the following instances are industry members not subject to stronger competitive pressures from substitute products?

B. Buyers are dubious about using substitutes

38

Industry rivals tend to experience weak competitive pressures from substitute products when

D. Buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the performance they deliver

39

Just how strong the competitive pressures are from substitute products depends on

B. Whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes

40

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

C. Coca-Cola as a substitute for Pepsi

41

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

D. Whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry

42

The bargaining leverage of suppliers is greater when

A. There are no good substitutes for the items being furnished by the suppliers and the number of suppliers is relatively small

43

In which one of the following instances are the competitive pressures that industry members experience in their dealings with suppliers not weakened?

E. When the items purchased from suppliers are in short supply

44

Supplier bargaining power is weaker when

A. Good substitute inputs exist or new ones emerge

45

Which one of the following is not a factor that affects the strength of supplier bargaining power?

C. Whether industry members are struggling to make good profits because of slow-growing market demand

46

Which one of the following is not a factor in causing supplier bargaining power to be relatively strong?

C. The input being supplied is a commodity

47

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

A. Whether needed inputs are in short supply or whether ample supplies are readily available from several different suppliers

48

When one or more industry members have unusually effective and mutually advantageous partnerships with their suppliers,

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

49

Which one of the following is not a reason why industry members are often motivated to enter into collaborative partnerships with key suppliers?

A. To reduce the costs of switching suppliers

50

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers not relatively strong?

A. When buyer demand is growing rapidly

51

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

E. Whether demand-supply conditions represent a buyer's market or a seller's market

52

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

B. The extent to which buyers can exercise enough bargaining power to influence the terms and conditions of sale in their favor and whether the extent of collaboration between certain sellers and certain buyers in the industry places rivals lacking such collaborative arrangements at a competitive disadvantage

53

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when

C. One or more rival sellers form mutually advantageous partnerships with important or prestigious buyers such that rivals lacking such partnerships are placed at a competitive disadvantage

54

Competitive pressures stemming from buyer bargaining power tend to be weaker when

C. The costs incurred by buyers in switching to competing brands or to substitute products are relatively high

55

Which of the following conditions acts to weaken buyer bargaining power?

A. When buyers are unlikely to integrate backward into the business of sellers

56

Which of the following is not a factor that causes buyer bargaining power to be stronger?

B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities

57

Buyers are in position to exert strong bargaining power in dealing with sellers when

E. The number of buyers is small or when a customer is particularly important to a seller

58

Which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak?

C. Whether buyer needs and expectations are changing rapidly or slowly

59

Which of the following factors does not affect whether buyer bargaining power and seller-buyer collaboration are an important source of competitive pressure in an industry?

E. Whether buyers have a strong preference for products of superior quality or just average quality

60

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

B. Whether the seller is a manufacturer or a wholesaler/distributor

61

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 the part of both suppliers and customers

D. Is conducive to industry members earning attractive profits

62

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products and considerable bargaining leverage on the part of both suppliers and customers

A. Is competitively unattractive from the standpoint of earning good profits

63

As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces,

B. The lower the combined profitability of industry members

64

The "driving forces" in an industry

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

65

Industry conditions change

D. Because important forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions

66

The task of driving forces analysis is to

D. 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

67

Which of the following is not generally a "driving force" capable of producing fundamental changes in industry and competitive conditions?

D. Ups and downs in the economy and in interest rates

68

Which of the following are most unlikely to qualify as driving forces?

D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances

69

Increasing globalization of the industry can be a driving force because

C. It tends to increase rivalry among industry members and often shifts the pattern of competition among an industry's major players, favoring some and disadvantaging others

70

Driving forces analysis

A. Involves identifying the driving forces, assessing whether their 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

71

Driving forces analysis helps managers identify whether

A. The combined impacts of the driving forces will act to increase/decrease market demand, increase/decrease competition and raise/lower industry profitability in the years ahead

72

An industry's driving forces

B. Generally act in ways which will strengthen or weaken market demand, competition and industry profitability in future years

73

Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration and growing buyer-seller collaboration

74

In analyzing driving forces, the strategist's role is to

A. Identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition and (3) industry profitability

75

Which one of the following is not an integral part of driving forces analysis?

B. Determining whether the driving forces are acting to cause one or more industry rivals to shift to a different strategic group

76

Which of the following is most likely to qualify as a driving force?

B. Wildly successful introduction of innovative new products by one or more industry rivals that force other rivals to respond quickly or lose a major share of their customers to the innovating rival(s)

77

Which one of the following is not a common type of driving force?

D. Increasing efforts on the part of industry members to collaborate closely with their suppliers

78

A strategic group

C. Is a cluster of industry rivals that have similar competitive approaches and market positions

79

A strategic group consists of those firms in an industry that

D. Employ similar competitive approaches and occupy similar positions in the market

80

The concept of strategic groups is relevant to industry and competitive analysis because

B. Strategic group maps help identify each company's market position and its closest competitors

81

In mapping strategic groups

C. The best variables to use as axes for the map are those that differentiate how rivals have positioned themselves in the marketplace

82

Which of the following is not an appropriate guideline for developing a strategic group map for a given industry?

C. The variables chosen as axes for the map should be highly correlated

83

With the aid of a strategic group map, one can

E. Often learn to what extent (a) industry driving forces and competitive pressures favor some companies or groups and hurt others and (b) the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position

84

Strategic group mapping is a technique for displaying

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

85

Which one of the following pairs of variables is least likely to be useful in drawing a strategic group map?

D. Level of profitability and size of market share

86

One of the things that can be gleaned from a strategic group map of industry rivals is

D. Whether profit prospects vary from strategic group to strategic group due to strengths and weaknesses in their respective market positions on the map (perhaps because industry driving forces and competitive pressures are acting to favor some strategic groups and to disadvantage other groups)

87

The payoff of good scouting reports on rivals is improved ability to

A. Anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace

88

Having good competitive intelligence about rivals' strategies, latest actions and announcements, resource strengths and weaknesses and moves to improve their situation is important because

B. It helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals

89

Good competitive intelligence about the strategies and competitive strengths and weaknesses of rival companies helps management determine

E. All of these

90

In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as:

E. All of these

91

The key success factors in an industry

A. Are those competitive aspects that most affect industry members' abilities to prosper in the marketplace⎯the particular strategy elements, product attributes, resources, competencies, competitive capabilities and market achievements that spell the difference between being a strong competitor and a weak competitor

92

In identifying an industry's key success factors, strategists should

B. Consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful and what shortcomings are almost certain to put a company at a significant competitive disadvantage

93

An industry's key success factors

C. Can be determined from an analysis of an industry's dominant economic characteristics, what competition is like, the impacts of the driving forces, the comparative market positions of industry members and the likely next moves of industry rivals

94

Which of the following is not a good example of a marketing-related key success factor?

A. Product R & D capabilities and expertise in product design

95

Which of the following is a good example of a manufacturing-related key success factor?

B. High labor productivity (especially if the production process has high labor content)

96

Evaluating whether an industry's environment presents a company with a sufficiently attractive business opportunity involves

A. Sizing up overall industry and competitive conditions to determine whether the industry's overall profit prospects are above average, average or below average

97

Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity?

A. The industry's growth potential, whether competition appears destined to become stronger or weaker and whether the industry's overall profit prospects are above average, average or below average

98

Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors?

E. Whether the industry's product is strongly or weakly differentiated