Question 1

Industry life cycle models aim to explain organisation and industry growth and decline over time.

Accepted Answer

Industry life cycle models are designed to provide insights into the different stages of development that industries go through over time, and to help explain the factors that drive growth, maturity, and decline within these markets. These models can be useful for firms looking to position themselves for success within a given industry, as well as for investors looking to assess the long-term viability of a particular sector.

Question 2

Government policies and regulations can be a barrier to new entrants in an industry.

Accepted Answer

Government policies and regulations can require new entrants to obtain licenses, permits or comply with strict requirements, which can increase the cost of entry and create a barrier to competition in certain industries.

Question 3

An industry is defined as a group of organisations producing close substitutes.

Accepted Answer

This is the definition of an industry according to economics.

Question 4

Industry life cycles are not similar to product life cycles.

Accepted Answer

Industry life cycles and product life cycles share similar stages such as introduction, growth, maturity, and decline, indicating a pattern of development and decline that affects both industries and individual products.

Question 5

Ansoff argued that it is important to consider the different levels of turbulence in industries.Briefly discuss each level and give an example of each.

Accepted Answer

The answer of Ansoff argued that it is important to...

Question 6

Economic trends are often key drivers of industry growth.

Accepted Answer

Economic trends such as GDP growth, consumer spending, and interest rates can greatly impact industry growth by influencing demand for products or services and affecting the cost of production. Therefore, economic trends are often key drivers of industry growth.

Question 7

Using the five forces model,explain when industry profitability will be very high.

Accepted Answer

The answer of Using the five forces model,explain when industry...

Question 8

In an industry analysis in the public sector it is NOT relevant to ask:
A)How does this influence group affect our organisation?
B)Why does this influence group affect our organisation?
C)When will we feel the affect of this influence group on our organisation?
D)What gives this influence group power to affect our organisation?

Accepted Answer

The question of when the influence group will affect the organization is not relevant in industry analysis as it is not directly related to understanding the impact of the influence group or how to respond to it. Instead, it focuses on a specific timeline that may not be predictable or controllable. It is more important to understand how and why the influence group can affect the organization and what can be done to mitigate or harness that influence.

Question 9

The five forces model is a useful tool of analysing an industry.Briefly discuss the five forces.

Accepted Answer

The answer of The five forces model is a useful...

Question 10

What are the benefits of scenario planning as an alternative to the five forces model?

Accepted Answer

The answer of What are the benefits of scenario planning...

Question 11

Why should the concept of an industry also include a geographic element,as well as the group of organizations that define it?

Accepted Answer

The answer of Why should the concept of an industry...

Question 12

A local council can be treated as a geographic monopoly in competition with other geographic monopoly councils for funds from the common provider.

Accepted Answer

A local council is typically the sole provider of public services within its geographic boundaries, which can be seen as a form of monopoly. When competing for funding from a common provider, such as a central government, one council's success in securing funding can come at the expense of other councils. Therefore, a local council can be seen as in competition with other geographic monopoly councils for funding.

Question 13

Pensions are one of the largest costs to government and they are expected to decrease dramatically over time.

Accepted Answer

Pensions are actually expected to increase over time due to an aging population and longer life expectancies. It is a major cost to government budget and requires continuous monitoring and adjustment to ensure they are sustainable.

Question 14

Not many countries are affected by major technology changes.

Accepted Answer

Many countries are affected by major technology changes, as these changes often have significant impacts on economic, social, and cultural structures. Advances in areas such as artificial intelligence, robotics, and automation can have far-reaching effects on industries and employment, while shifts towards digital technologies can require significant infrastructure and regulatory adaptations. Therefore, technology changes can have profound effects on many countries and their citizens.

Question 15

In Australia,if a product gains entry to the government's Pharmaceutical Benefits Scheme,the government does not subsidise its cost to users.

Accepted Answer

If a product gains entry to the government's Pharmaceutical Benefits Scheme, the government subsidizes the cost of the product, reducing the cost for users.

Question 16

Scenario planning is an alternative approach in which several different scenarios are developed so that the organisation can consider how it would position itself under each.

Accepted Answer

This statement is true. Scenario planning involves developing multiple scenarios to anticipate and prepare for potential future events, allowing the organization to consider its positioning and strategy under each.

Question 17

Critical success factors vary across industries.

Accepted Answer

Critical success factors are unique to each industry and can even vary within different sectors of the same industry. Therefore, the success factors that are critical for one industry may not be applicable to another.

Question 18

'Analysis of the macro-environment is a waste of time and effort for all but the largest corporations.' Discuss the relevance of this observation.

Accepted Answer

The answer of 'Analysis of the macro-environment is a waste...

Question 19

The diamond model framework highlights the role of government.

Accepted Answer

The diamond model framework is a theory of international competitiveness that highlights the role of different factors, including government, in shaping a country's competitive advantage. The other factors include factor conditions (e.g. labor, capital, natural resources), related and supporting industries, and firm strategy, structure, and rivalry. However, the role of government is particularly important in creating an environment that supports and encourages business growth and innovation. This can include policies that support education and workforce development, infrastructure investments, tax policies, and regulatory reform.

Question 20

If it is difficult or costly to withdraw from an industry,competitors may decide to stay in the industry even if they are making losses.

Accepted Answer

This statement is true. When competitors find it difficult or costly to exit an industry, they may continue operating even if they are making losses. This can result in an oversupply of goods or services in the market, which further drives down prices and profits for all firms in the industry. This phenomenon is known as the "exit barrier effect" and it can lead to a prolonged period of losses and low profitability for firms in the industry.

Quiz 3: Analysing the External Environment