Deck 3: Evaluating a Companys External Environment

Question 1

________ is/are the strategically relevant factors outside a company's industry boundaries-economic conditions,political factors,sociocultural forces,technological factors,environmental factors,and legal/regulatory conditions.

A)General economic conditions plus the factors driving change in the markets where a company operates
B)The competitive market environment that exists between a company and its competitors
C)The dominant economic and technological features of a company's industry
D)The industry and the competitive arena in which the company operates
E)A company's macroenvironment

Answer 1

E

Question 2

The marketplace being a competitive battlefield is primarily due to

A)the ongoing race among rivals to achieve the fastest rate of growth in revenues and profits.
B)the ongoing efforts of industry members to introduce innovative products/services as fast followers into the marketplace.
C)the ability of industry rivals to build strong defenses against the industry's driving forces.
D)the constant rivalry of firms to strengthen buyer patronage among competing sellers of a product or service,in order to win a competitive edge over rivals.
E)the efforts of industry incumbents to lower cost products/services at a faster rate than their rivals.

Answer 2

D

Question 3

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

A)The power and influence of industry-driving forces
B)The bargaining power of suppliers and seller-supplier collaboration
C)The threat of new entrants into the market
D)The attempts of companies in other industries to win customers over to their own substitute products
E)The market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

Answer 3

A

Question 4

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

A)The number of buyers is small,or a customer is particularly important to the seller.
B)Buyers are relatively well informed about sellers' products,prices,and costs.
C)Buyer needs and expectations are changing slowly or rapidly.
D)Buyer demand is weak or strong and slowly or rapidly growing.
E)Buyers pose a credible threat of integrating backward into the business of sellers.

Question 5

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

A)Some buyers are a threat to integrating backward into the business of sellers.
B)The industry is composed of a few large sellers,and the customer group consists of numerous buyers that purchase in fairly small quantities.
C)Buyers have considerable discretion over whether and when they purchase the product.
D)Buyers are well informed about sellers' products,prices,and costs.
E)The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.

Question 6

Competitive pressures stemming from buyers' bargaining power tend to be weaker when

A)the number of buyers is small,such that each customer's business tends to be particularly important to a seller.
B)buyer demand is growing slowly or maybe even declining.
C)the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.
D)buyers are well informed about sellers' products,prices,and costs.
E)the buyer group consists of a few large buyers and the seller group consists of numerous small firms.

Question 7

A company's broad macroenvironment refers to

A)the industry and competitive arena in which the company operates.
B)general economic conditions plus the factors driving change in the markets being served.
C)all the strategically significant forces and factors outside a company's boundaries-general economic conditions,population demographics,societal values and lifestyles,technological factors,and governmental legislation and regulation.
D)the competitive market environment that exists between a company and its competitors.
E)the dominant economic features of a company's industry.

Question 8

Which of the following is not one of the principal components of strategic significance in the PESTEL analysis?

A)Technological factors that include the pace of change and technical developments possessing the potential to impact society
B)Changes in laws and regulations that give rise to the birth of new industries,new knowledge,and disruptive technologies
C)Economic conditions that include the general economic climate and specific factors such as interest rates,inflation rate,and unemployment rate,as well as conditions in the stock and bond markets that can affect consumer confidence
D)Sociocultural forces including societal values,attitudes,cultural factors,and lifestyles that impact business
E)Environmental forces that include the competitive structure,the degree of industry fragmentation,and the mobility barriers that inhibit business

Question 9

________ is the most powerful and widely known tool used to assess the state of competition in an industry.

A)PESTEL analysis
B)SWOT analysis
C)Financial ratio analysis
D)Strategic group mapping
E)Porter's five-force model

Question 10

Using the five-forces model of competition to determine the character and strength of the competitive forces within a given industry involves

A)building the picture of competition in two steps: (1)determining which rival has the biggest competitive advantage and (2)assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits.
B)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 five forces are (strong,moderate or weak);and (3)determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry.
C)gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage.
D)assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures.
E)evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors.

Question 11

Which of the following conditions acts to weaken buyers' bargaining power?

A)When buyers are unlikely to integrate backward into the business of sellers
B)When buyers are well informed about sellers' products,prices,and costs
C)When the costs incurred by buyers in switching to competing brands or to substitute products are relatively low
D)When buyers have the ability to postpone purchases if they do not like the prices offered by sellers
E)When buyers are few in number and/or often purchase in large quantities

Question 12

The nature and strength of the competitive forces that prevail in an industry is generally a joint product of all of the following except

A)pressures associated with rivalry among sellers to attract buyer patronage.
B)threats that firms outside the industry will decide to enter the market.
C)attempts of companies in other industries to win buyers over to their own substitute products.
D)pressures stemming from the bargaining power of both suppliers and buyers.
E)those associated with environmental forces such as climate change or water shortages.

Question 13

Which of the following is likely to have the biggest strategy-shaping impact on on-demand transportation providers such as Uber and Lyft?

A)Tesla and ZipCar announce a joint venture for electric automobile sharing services.
B)Amazon launches a mobile delivery service via drones.
C)Apple and Ford launch a global network of autonomous driverless cars,buses,and trucks on demand via a mobile app.
D)Greyhound develops and markets a mobile app for customers to purchase intercity bus tickets.
E)Yellow Cab company launches mobile app campaigns for community-connection and awareness.

Question 14

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

A)whether most buyers possess roughly equal or varying degrees of bargaining power.
B)how many buyers are engaged in collaborative partnerships with sellers.
C)whether entry barriers are high or low.
D)whether the overall quality of the items being furnished by industry members is rising or falling.
E)whether buyer demand is strong or declining.

Question 15

The most powerful of the five typical sources of competitive pressures is usually

A)the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.
B)the competitive pressures that stem from the ready availability of attractively priced substitute products.
C)the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates.
D)the bargaining power and leverage that large customers are able to exercise.
E)associated with the potential entry of new competitors.

Question 16

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

A)Market size,growth rate,and prospects
B)Scope of competitive rivalry including geographic area
C)Market demand-supply conditions
D)Strength of both driving forces and competitive forces
E)Role and pace of technological change

Question 17

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
B)when buyers are relatively well informed about sellers' products,prices,and costs
C)when buyers pose a major threat to integrate backward into the product market of sellers
D)when sellers' products are weakly differentiated,making it easy for buyers to switch to competing brands
E)when buyers have considerable discretion over whether and when they purchase the product

Question 18

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?

A)the strength of the federal banking system
B)the exogenous forces related to the general environmental demand
C)social factors that could fuel a political agenda and create greater transparency
D)bailouts and energy policies that are industry-specific
E)tax policy,fiscal policy,and tariffs providing impetus for antitrust matters

Question 19

Each of the following exemplifies the impact of the macroenvironment on a company's strategic opportunities except

A)United States' sales of Stolichnaya Vodka dwindle on account of a boycott of Russian products.
B)consumer confidence in Volkswagen drops precipitously because of falsified emissions data.
C)Netflix squares off with Amazon Prime as its most potent rival in the streaming television and film industry.
D)traffic increases at the outlets of Whole Foods following its introduction of new store formats that are solely for the sale of private label generic products.
E)sales of FitBit surge on account of new features that monitor the users' blood pressure and sleep habits.

Question 20

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?
B)What strategic moves are rivals likely to make next?
C)What are the key factors for future competitive success?
D)Does the outlook for the industry offer good prospects for profitability?
E)What forces are driving changes in the industry,and what impact will these changes have on competitive intensity and industry profitability?

Question 21

The bargaining leverage of suppliers is greater when

A)only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.
B)industry members incur low costs in switching their purchases from one supplier to another.
C)industry members purchase in large quantities and thus are important customers of the suppliers.
D)it makes good economic sense for industry members to vertically integrate backward.
E)the supplier industry is composed of a large number of relatively small suppliers.

Question 22

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

A)Lyft or Uber as a substitute for rental cars
B)Airbnb as a substitute for hotels and motels
C)Dasani water as a substitute for Aquafina water
D)Smartphones as substitutes for film cameras
E)Netflix and Amazon streaming video on demand as a substitute for DVD players

Question 23

In which one of the following instances is supplier bargaining power and leverage not weakened?

A)When industry members pose a credible threat of backward integration into the business of suppliers
B)When sales to a strategic partner constitute a big percentage of their total sales
C)When the items purchased from suppliers are in short supply
D)When the buying firms purchase in large quantities and thus are important customers of the suppliers
E)When the cost of switching from one supplier to another is low

Question 24

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

A)low buyer-switching costs and rival sellers that are relatively equal in size and capability.
B)rapid growth in buyer demand and high buyer-switching costs.
C)a recent acquisition of a weak rival by an industry outsider with the intent of turning the acquisition into a major contender.
D)low barriers to entry and weakly differentiated products among rival sellers.
E)slow growth in buyer demand and strongly differentiated products.

Question 25

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

A)The costs to buyers of switching over to the substitutes are low.
B)Buyers are dubious about using substitutes.
C)The quality and performance of the substitutes is well matched to what buyers need to meet their requirements.
D)Buyer brand loyalty is weak.
E)Substitutes are readily available at competitive prices.

Question 26

Rivalry among competing sellers is generally more intense when

A)buyer demand is growing rapidly.
B)the industry's driving forces are strong and rivals have strongly differentiated products.
C)barriers to entry are moderately high and the pool of likely entry candidates is small.
D)industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit volume.
E)barriers to entry are high and buyer switching costs are high.

Question 27

In which one of the following instances is suppliers' bargaining power and leverage not weakened?

A)When industry members pose a credible threat of backward integration into the business of suppliers
B)When the cost of switching from one supplier to another is low
C)When the buying firms purchase in large quantities and thus are important customers of the suppliers
D)When the item being supplied is a commodity
E)When the items purchased from suppliers are in short supply

Question 28

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

A)To reduce the costs of switching suppliers
B)To speed the availability of next-generation components
C)To enhance the quality of parts and components being supplied and reduce defect rates
D)To squeeze out important cost savings for both themselves and their suppliers
E)To reduce inventory and logistics costs

Question 29

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

A)the strength of buyer loyalty to existing brands.
B)whether the industry's driving forces make it harder or easier for new entrants to be successful.
C)whether the strategies of industry members are well matched to the industry's key success factors.
D)whether the industry offers an opportunity for a blue ocean strategy.
E)to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

Question 30

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

A)whether the profits of suppliers are relatively high or low.
B)the number of suppliers that each seller/industry member purchases from on average.
C)how aggressively rival industry members are trying to differentiate their products.
D)the extent to which 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.
E)whether the prices of the items being furnished by the suppliers are rising or falling.

Question 31

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

A)Incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers.
B)Industry members are struggling to earn good profits.
C)Entry barriers are relatively low.
D)Existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence.
E)Newcomers can expect to earn attractive profits,and a number of outsiders have the expertise and resources to hurdle past whatever entry barriers exist.

Question 32

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

A)Rapid market growth
B)Sizable capital requirements and an array of regulatory requirements
C)Strong buyer loyalty to existing brands
D)Sizable economies of scale in production
E)Difficulties in gaining access to distribution and securing adequate space of retailers' shelves

Question 33

The competitive pressures from substitute products tend to be stronger when

A)buyers are relatively comfortable with the quality and performance of substitutes,and the costs to buyers of switching over to the substitutes are low.
B)there are more than 10 sellers of substitute products.
C)substitutes exhibit the latest in technological innovation.
D)buyers have high psychic costs in severing existing brand relationships and establishing new ones.
E)demand for the industry's product is not very price sensitive.

Question 34

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

A)Incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers.
B)Buyers have a high degree of loyalty to the brands and product offerings of existing industry members.
C)Buyer demand for the product is growing fairly slowly.
D)Few outsiders have the expertise and resources to hurdle past whatever entry barriers exist.
E)Newcomers can expect to earn attractive profits.

Question 35

Rivalry among competing sellers tends to be less intense when

A)industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales.
B)buyer demand is weak and many sellers have excess capacity and/or inventory.
C)industry rivals are not particularly aggressive in drawing sales and market share away from rivals.
D)rivals have diverse strategies and objectives,and are located in different countries.
E)rival sellers have weakly differentiated products.

Question 36

The most powerful of the five competitive forces is usually the

A)competitive pressures that stem from the ready availability of attractively priced substitute products.
B)competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage.
C)competitive pressures that emerge from close collaboration with suppliers.
D)competitive pressures associated with the potential entry of new competitors.
E)competitive pressures from the bargaining power and leverage that large customers are able to exercise.

Question 37

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

A)High buyer switching costs
B)Rapid growth in buyer demand
C)Industry members are not aggressive in drawing sales and market share away from rivals
D)One or more competitors become dissatisfied with their market position
E)Strongly differentiated products among rival sellers

Question 38

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

A)Whether needed inputs are in short or ample supply
B)Whether industry members are a strong threat to integrate backward into the business of suppliers
C)Whether industry members are struggling to make good profits because of slow-growing market demand
D)Whether the costs of industry members to switch their purchases to alternative suppliers or substitutes are high or low
E)Whether the item being supplied is a commodity that is readily available from many suppliers

Question 39

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.
B)the pool of entry candidates is large,and some have resources that would make them formidable market contenders.
C)the industry's market growth is rapid.
D)newcomers can be expected to earn attractive profits.
E)buyers have little loyalty to the brands and product offerings of existing industry members.

Question 40

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

A)whether the available substitutes are strongly or weakly differentiated and whether buyers make purchases frequently or infrequently.
B)whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.
C)whether the available substitutes are products or services.
D)whether the producers of substitutes have ample budgets for new product R&D.
E)the speed with which buyer needs and expectations are changing.

Question 41

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

A)Entry or exit of major firms
B)Changing societal concerns,attitudes,and lifestyles
C)Diffusion of technical know-how across more companies and more countries
D)Increasing efforts on the part of industry members to collaborate closely with their suppliers
E)Technological change and manufacturing process innovation

Question 42

The collective impact of the five competitive forces on competitive pressures tends to

A)strengthen the industry's driving forces.
B)lower the combined profitability of industry members.
C)make it difficult to achieve a competitive advantage via anything other than being the industry's low-cost leader.
D)increase the opportunities for industry incumbents to attain a competitive advantage.
E)raise the number of industry key success factors.

Question 43

The driving forces in an industry

A)are usually triggered by changing technology or stronger learning/experience curve effects.
B)are usually spawned by growing demand for the product,an outbreak of price cutting,and big reductions in entry barriers.
C)are major underlying causes of change in industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.
D)appear when an industry begins to mature but are seldom present during early stages of the industry life cycle.
E)are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

Question 44

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

A)Changes in the long-term industry growth rate
B)Increasing globalization of the industry
C)Product innovation and technological change
D)Ups and downs in the economy and interest rates
E)New government regulations or significant changes in government policy toward the industry

Question 45

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 impact of the driving forces.
B)identifies which strategic group is the most powerful.
C)helps managers identify which industry member is likely to become (or remain)the industry leader and why.
D)helps managers identify which key success factors are most likely to help their company gain a competitive advantage.
E)helps managers identify which of the five competitive forces will be the strongest driver of industry change.

Question 46

Steps involved in driving forces analysis include

A)developing a comprehensive list of all the potential causes of changing industry conditions.
B)predicting which new driving forces will emerge next.
C)making it difficult to achieve a competitive advantage via anything other than being the industry's low-cost leader.
D)identifying the driving forces,assessing whether their impact will make the industry more or less attractive,and determining what strategy changes are needed to prepare for the impact of the driving forces.
E)discerning which among the five competitive forces is most potent and which is least potent.

Question 47

A strategic group consists of those firms in an industry that

A)are subject to the same driving forces.
B)place about the same emphasis on each distribution channel.
C)use the same key success factors to differentiate their products.
D)employ similar competitive approaches and occupy similar positions in the market.
E)have similar size market shares.

Question 48

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

A)Changes in the long-term industry growth rate,the entry or exit of major firms,and changes in cost and efficiency
B)Increasing globalization of the industry and product innovation
C)New Internet technology applications,new government regulations,and significant changes in government policy toward the industry
D)Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances
E)Changes in who buys the industry's product and how they use it

Question 49

A competitive environment in which 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

A)lacks powerful driving forces.
B)gives each industry competitor the best potential for building sustainable competitive advantage.
C)makes it hard for industry members to pursue a differentiation strategy.
D)is conducive to industry members earning attractive profits.
E)requires that industry members have low costs.

Question 50

A competitive environment in which 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.
B)offers little ability to build a sustainable competitive advantage.
C)is highly conducive to achieving strong product differentiation and high brand loyalty.
D)offers moderate to good prospects for achieving low costs and building a sustainable competitive advantage.
E)requires that industry members have a strongly differentiated product offering in order to be profitable.

Question 51

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

A)Changes in who buys the product and how they use it,changes in the long-term industry growth rate,and changes in cost and efficiency
B)Entry or exit of major firms,product innovation,and marketing innovation
C)Increases in the economic power and bargaining leverage of customers and suppliers,growing supplier-seller collaboration,and growing buyer-seller collaboration
D)Diffusion of technical know-how and changing societal concerns,attitudes,and lifestyles
E)Changes in manufacturing processes brought on by technological change,increasing globalization of the industry,and new Internet capabilities

Question 52

Increasing globalization can be a driving force in an industry because

A)market growth rates go up,product innovation speeds up,and new firms are likely to enter the industry.
B)companies need to spread their operating reach into more and more country markets to meet consumer demand and take advantage of available operating activities.
C)foreign producers typically have lower costs,greater technological expertise,and more product innovation capabilities than domestic firms.
D)the products and services of foreign competitors are nearly always cheaper or of better quality than those of domestic companies.
E)it results in companies having fewer competitors and a strategic group map with fewer circles.

Question 53

Based on an analysis of the five forces that increase or decrease competitive pressures in an industry,in which of the following industries is profitability likely to be highest?

A)Video streaming services
B)Supermarkets
C)Commercial airlines
D)Electric and gas utilities
E)Tire manufacturing

Question 54

An industry's driving forces

A)are generally determined by competitive pressures,the sizes of strategic groups,and the power of rival firms' competitive strategies.
B)generally act in ways that will strengthen or weaken market demand,make competition more or less intense,and lead to higher or lower industry profitability.
C)frequently cause a leveling off of industry growth and a reduction in the bargaining power of buyers.
D)are normally triggered by ups and downs in the economy,higher or lower inflation rates,higher or lower interest rates,or important new strategic alliances.
E)can be triggered by such factors as growing competitive pressures from substitute products,greater seller-supplier collaboration,and the efforts of rival firms to employ new or different offensive strategies.

Question 55

Rivalry among competing firms tends to be more intense when

A)demand for the product is growing slowly,one or maybe several industry members become dissatisfied with their market position,buyers have low switching costs,and strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to build market share.
B)the products/services of rival sellers are strongly differentiated and buyer demand is strong.
C)rivals are relatively content with their market position.
D)there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members.
E)there are fewer firms in the industry that have unequal market shares.

Question 56

A strategic group

A)consists of those industry members that are growing at about the same rate and have similar product line breadth.
B)includes all rival firms having comparable profitability.
C)is a cluster of industry rivals that have similar competitive approaches and market positions.
D)consists of those firms whose market shares are about the same size.
E)is made up of those firms having comparable profit margins.

Question 57

Industry conditions change

A)because of such powerful driving forces as swings in buyer demand,changing interest rates,ups and downs in the economy,and higher/lower entry barriers.
B)because of newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups.
C)because new industry key success factors emerge.
D)because forces create pressures or incentives for industry participants (competitors,customers,suppliers)to alter their actions in important ways.
E)chiefly because of changes in the barriers to entry and the degree of competition from substitute products.

Question 58

Not all positions on a strategic group map are equally attractive because

A)entry and exit barriers are different for each strategic group.
B)key success factors are usually quite different for differently positioned industry participants.
C)small strategic groups are always less profitable than large strategic groups.
D)across-group rivalry is strongest at the outer edges of the strategic group map.
E)industry driving forces and competitive pressures favor some companies or groups and hurt others,and the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position.

Question 59

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

A)Variables chosen as axes for the map should indicate big differences in how rivals have positioned themselves to compete in the marketplace.
B)Variables chosen as axes for the map can be quantitative,qualitative,or discrete and defined in terms of distinct classes and combinations.
C)Variables selected as axes for the map should be highly correlated.
D)Several maps should be drawn if more than one pair of variables can help illuminate differences in the competitive positioning of industry members.
E)Sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

Question 60

Based on an analysis of the five forces that increase or decrease competitive pressures in an industry,in which of the following industries is profitability likely to be lowest?

A)Pizza restaurants
B)Wireless lighting systems
C)Delivery services using drones
D)Wearable fitness and health monitors
E)Pharmaceuticals

Question 61

Angela and Jeff are co-owners of five specialty cupcake and dessert bakeries in their region.Which of the following questions would not help them to predict the next strategic moves and countermoves of their rivals?

A)How frequently does their rival fulfill special orders for custom cupcakes and how large are those special orders?
B)How does the rival manage door-to-door deliveries at no extra cost?
C)What percentage of customers frequent the rival's store?
D)Why are the rival's cupcakes so popular among customers?
E)Which mode of transport does the rival's supplier use?

Question 62

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

A)The industry's growth potential
B)Whether competitive pressures will likely grow stronger or weaker
C)Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces
D)The company's competitive position in the industry and its ability to perform industry key success factors
E)Whether the industry's product is strongly or weakly differentiated

Question 63

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

A)try to single out all factors that play a major role in shaping whether buyer demand grows rapidly or slowly.
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.
C)consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak.
D)consider what it will take to overtake the company with the industry's overall best strategy.
E)focus their attention on what it will take to capitalize on impacts of the industry's driving forces.

Question 64

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

A)predict what strategic moves rivals are likely to make next,thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals' missteps.
B)determine which rivals are in the best strategic group.
C)figure out how many key success factors a rival has.
D)determine whether a rival is gaining or losing market share,whether rivals are increasing or decreasing R&D spending,and what new marketing promotions are in the works.
E)determine whether a rival has the best strategy and is the industry leader.

Question 65

Identify five factors that tend to weaken the intensity of competitive rivalry among an industry's member firms.

Question 66

In seeking to predict the next moves of close or key rivals,it is not useful to consider which of these questions?

A)Which rivals badly need to increase their unit sales and market share?
B)Are there predictable trends in the timing of rivals' new-product launches or marketing promotions?
C)Which rivals have a strong incentive,along with the resources,to make major strategic changes?
D)Which rivals are likely to enter new geographic markets or expand their product offerings?
E)Which rivals have the strongest management team.

Question 67

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

A)identifies who the industry's current market share leaders are.
B)helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves.
C)helps identify which rival is in which strategic group.
D)enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes.
E)enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

Question 68

What are the key questions that form the framework of thinking strategically about a company's industry and competitive environment?

Question 69

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

A)High utilization of fixed assets
B)A well-known and well-respected brand name
C)Breadth of product line and product selection
D)Clever advertising
E)Courteous,personalized customer service

Question 70

Which of the following factors should a company consider when determining if an industry offers good prospects for attractive profits?

A)The industry's growth potential,whether competition appears destined to become stronger or weaker,how the industry's driving forces might affect overall industry profitability,the company's competitive position relative to rivals,and the company's proficiency in performing industry key success factors
B)An assessment of which firms in the industry have the best and worst competitive strategies,whether the number of strategic groups in the industry is increasing or decreasing,and whether economies of scale and experience curve effects are a key success factor
C)Whether there are more than five key success factors and more than five barriers to entry
D)Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group
E)Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product

Question 71

In doing driving forces analysis,is it sufficient to simply identify the driving forces that are operating to alter industry and competitive conditions? Why or why not? If not,then explain what else is required for a complete driving forces assessment.

Question 72

What is the analytical value of studying competitors and trying to predict what moves rivals will make next?

Question 73

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

A)Global distribution capabilities
B)High labor productivity (especially if the production process has high labor content)
C)Low distribution costs
D)Accurate filling of buyer orders
E)Short delivery time capability

Question 74

Which of the following factors usually is not a consideration involved with evaluating whether an industry presents a sufficiently attractive business opportunity?

A)Constructing a strategic group map to assess the attractiveness of the competitive position of each strategic group to determine the overall attractiveness of all the strategic groups
B)Using value chain analysis to determine the relative cost positions of rival firms and who is the industry's lowest-cost producer
C)Determining which firms in the industry have a competitive advantage and how they attained their advantage
D)Determining the industry outlook for future profitability
E)Determining the overall strength of the five competitive forces

Question 75

Explain the meaning and significance of each of the following:
a.driving forces
b.PESTEL analysis
c.strategic group mapping
d.key success factors

Question 76

Identify and briefly explain any four of the factors that influence the strength or intensity of competitive rivalry among an industry's member firms.

Question 77

An industry's key success factors

A)are a function of market share,entry barriers,economies of scale,degree of vertical integration,and industry profitability.
B)vary according to whether an industry has high or low long-term attractiveness.
C)can be determined through identifying an industry's dominant economic characteristics,assessing the five competitive forces,considering the impacts of the driving forces,comparing the market positions of industry members,and forecasting the likely next moves of industry rivals.
D)can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies.
E)depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

Question 78

Identify five factors that tend to intensify competitive rivalry among an industry's member firms.

Question 79

Identify at least three benefits of constructing a strategic group map.

Question 80

The key success factors in an industry

A)are the strategy elements,intangible assets,and competitive capabilities that most affect industry members' abilities to prosper in the marketplace.
B)are determined by the industry's driving forces.
C)hinge on how many different strategic groups the industry has.
D)depend on how many rivals are trying to move from one strategic group to another.
E)are a function of such considerations as how many firms are in the industry,how many have market shares above five percent,and whether the business models being used are similar or diverse.