Question 1

According to the example provided in Chapter 5, www.1800contacts.com possesses a nontraditional barrier to entry referred to as:

Accepted Answer

The nontraditional barrier to entry possessed by www.1800contacts.com is their Internet domain name, which is easy to remember and recognizable, giving them a competitive advantage.

Question 2

Supplier concentration, switching costs, attractiveness of substitutes, and threat of forward integration are factors that have a direct impact on:

Accepted Answer

Supplier concentration and bargaining power of suppliers are directly related, as a concentrated supplier market gives suppliers more bargaining power. Switching costs, attractiveness of substitutes, and threat of forward integration are factors that impact the bargaining power of buyers and threat of substitutes, but do not have a direct impact on supplier power. Therefore, the correct answer is the bargaining power of suppliers, choice E.

Question 3

A ________ industry is one that is characterized by a large number of firms of approximately equal size.

Accepted Answer

A fragmented industry is one where there are many small firms operating within the same market, with no company holding a dominant position. This type of industry is often characterized by intense competition and low barriers to entry.

Question 4

A ________ industry is an industry that is experiencing significant international sales.

Accepted Answer

A global industry is one that has significant international sales, meaning that it operates on a global scale and has a presence in multiple countries.

Question 5

Firms that pursue a ________ strategy compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market.

Accepted Answer

Multidomestic strategy is a decentralized approach where firms differentiate their products and services in each country to meet the local demands, preferences, and cultures. This strategy allows firms to adapt to the changing market conditions in each country and compete effectively for market share.

Question 6

A ________ industry is an industry that is experiencing slow or no increase in demand.

Accepted Answer

A mature industry is one that has already reached its peak and is experiencing slow or no increase in demand. This is because the market is well established and there is little room for growth or expansion. In contrast, declining industries are experiencing a decrease in demand, while emerging industries are just starting to grow and develop. Global and fragmented industries refer to the scope and structure of the market, rather than the level of demand.

Question 7

John Petersen is thinking about starting a firm in the specialty chemical industry. In the industry analysis John has been conducting, one thing he has noticed is that the specialty chemical industry is characterized by the following factors: high supplier concentration, high switching costs for buyers when they switch from one supplier to another, and no attractive substitutes for the products that most of the suppliers provide. These factors concern John, because they tell him that the profitability of the specialty chemical industry is suppressed by the:

Accepted Answer

The high supplier concentration, high switching costs for buyers, and lack of attractive substitutes indicate that the bargaining power of suppliers is high. This means that suppliers have more power over pricing and other terms, which can limit the profitability of firms in the specialty chemical industry.

Question 8

The Savvy Entrepreneurial Firm feature in Chapter 5 focuses on Sony. Which of Porter's five forces made a dramatic difference in the way the founder's of Sony decided to view their markets in the early years of the company?

Accepted Answer

The answer of The Savvy Entrepreneurial Firm feature in Chapter...

Question 9

Henry Jones recently launched a firm in the clothing industry, targeting teens ages 13-17. One thing Henry thinks he has accomplished is producing products that have universal appeal, so he will not vary his approach from country to country. Henry is pursuing a ________ strategy.

Accepted Answer

Henry is pursuing a global strategy, which involves offering the same products using the same marketing approach in all markets, aiming for universal appeal without variation from country to country.

Question 10

Jill Pattersen is starting a firm in the netbook industry. This industry is still so new that no standard operating procedures have been developed. Netbooks is an example of an ________ industry.

Accepted Answer

The fact that there are no standard operating procedures in place indicates that the industry is still in the early stages of development and is therefore an emerging industry.

Question 11

The primary opportunity existing for startups in emerging industries is to:

Accepted Answer

Emerging industries often present opportunities for startups to capture a first-mover advantage, allowing them to establish a strong market position before competitors enter the space.

Question 12

The primary opportunity existing for startups in fragmented industries is to:

Accepted Answer

The answer of The primary opportunity existing for startups in...

Question 13

According to the textbook, Nucor in steel, JetBlue in airlines, and Cirque du Soleil in circuses are examples of entrepreneurial firms who are exploiting opportunities in ________ industries.

Accepted Answer

The answer of According to the textbook, Nucor in steel,...

Question 14

Shelly James recently launched a firm in the fruit drink industry, and has already exported her fruit drinks to 9 different countries. One thing that Shelly's firm is doing is that it is varying the tastes of the fruit drinks it sells on a country by country basis to meet the demands of the local markets. Shelly's firm is pursuing a ________ strategy.

Accepted Answer

Shelly's firm is varying the taste of the fruit drinks on a country by country basis to meet the demands of the local markets, which means it is pursuing a multidomestic strategy. A multidomestic strategy focuses on adapting products or services to meet the unique needs and preferences of local markets.

Question 15

Opportunities for leadership, niche, harvest and divestment are associated with ________ industries.

Accepted Answer

Opportunities for leadership, niche, harvest, and divestment are typically associated with declining industries. In such industries, demand decreases over time, leading companies to adopt strategies like focusing on niche markets, reducing investment (harvesting), or exiting the market (divestment).

Question 16

According to the textbook, the first step in a competitor analysis is to:

Accepted Answer

The first step in a competitor analysis is to determine who the competition is. This involves identifying direct and indirect competitors in the industry. Once the competition is identified, further analysis can be conducted to assess their strengths, weaknesses, strategies, and market share.

Question 17

The five industry types discussed in the book include:

Accepted Answer

The five industry types discussed in the book are emerging, fragmented, mature, declining, and global. Option C lists these industry types correctly. Option E includes "consolidated" instead of "fragmented" which is not accurate. The other options do not accurately represent the industry types discussed in the book.

Question 18

According to the textbook, Sprig Toys in toys, Tesla Motors in automobiles, and Daisy Rock in guitars are example of entrepreneurial firms who are exploiting opportunities in ________ industries.

Accepted Answer

The answer of According to the textbook, Sprig Toys in...

Question 19

Which of the following was not identified in the textbook as a nontraditional barrier to entry?

Accepted Answer

Product differentiation is a traditional barrier to entry, as it involves creating a product that is distinct from competitors, making it harder for new entrants to compete.

Question 20

The two most common strategies pursued by firms in global industries are the ________ strategy and the ________ strategy.

Accepted Answer

The two most common strategies pursued by firms in global industries are the multidomestic strategy (customizing products and marketing strategies to fit the specific needs of each country/local market) and the global strategy (offering standardized products and marketing strategies across all markets). The other answer choices are not accurate in describing the commonly pursued strategies in global industries.

Quiz 5: Industry and Competitor Analysis