Question 1

The punctuated equilibrium view can also be described as a freezing but not unfreezing process in an industry's life cycle.

Accepted Answer

Punctuated equilibrium involves periods of stability (freezing) interrupted by rapid change (unfreezing), not just freezing.

Question 2

When the value of the dollar is low compared with the value of other currencies,products made in the United States are relatively inexpensive and products made overseas are relatively expensive.

Accepted Answer

When the value of the dollar is low, it takes less foreign currency units to purchase a dollar, making products made in the United States relatively less expensive for foreign buyers. At the same time, products made overseas become relatively more expensive for American buyers, as they have to exchange more dollars to purchase the same amount of foreign currency needed to make the purchase.

Question 3

United Airlines,Amtrak,and Greyhound are all companies in the transportation

Accepted Answer

The answer of United Airlines,Amtrak,and Greyhound are all companies in...

Question 4

Unfortunately,successful innovation cannot transform the nature of industry competition.

Accepted Answer

Successful innovation can disrupt and change the dynamics of industry competition by introducing new products, processes, or business models, challenging incumbent players, and creating new markets or segments.

Question 5

Which of the following components was an extension of Porter's original five forces model?

Accepted Answer

The risk of entry by potential competitors is an extension of Porter's original five forces model. The original five forces include the intensity of rivalry among established companies within an industry, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitutes for an industry's products, and the potential entry of new competitors. However, the risk of entry by potential competitors is not explicitly stated in the original model.

Question 6

Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry.

Accepted Answer

Deregulation of the mortgage industry refers to the loosening of government regulations and restrictions on lending practices. This was a political and legal decision that directly impacted the mortgage industry.

Question 7

Which of the following is not one of Porter's five forces,as proposed in his original model?

Accepted Answer

The answer of Which of the following is not one...

Question 8

What is the impact of shifting industry boundaries on firms within the industry?

Accepted Answer

Shifting industry boundaries often lead to more competitors entering the industry, as new opportunities arise and established firms diversify their offerings. This can increase competition and make it more difficult for existing firms to maintain market share and profitability.

Question 9

A group of firms all make writing implements-pens,pencils,and markers.This group should be referred to as a(n)

Accepted Answer

The group of firms that make writing implements consists of a collection of companies that produce similar products, which is the definition of an industry. Therefore, the correct answer is E) industry.

Question 10

A technological change such as the rise of the Internet can represent either an opportunity or a threat.

Accepted Answer

The rise of the Internet can offer various opportunities such as creating new industries, reaching a wider audience, and increasing productivity. However, it can also pose threats such as cybercrimes, digital divide, and loss of privacy.

Question 11

A group of firms all make tools for baking -- pots,pans,measuring cups,and utensils.This group should be referred to as a market segment.

Accepted Answer

A group of firms making tools for baking cannot be considered a market segment. A market segment refers to a group of consumers or businesses with similar needs or characteristics that are targeted by a company for its products or services. The group of firms mentioned in the statement can be considered a competitive market or an industry segment.

Question 12

One of the defining characteristics of the mature stage of the industry life cycle is that growth is low or zero.

Accepted Answer

In the mature stage of the industry life cycle, growth typically slows down and becomes low or zero. This is because the market is mostly saturated and competition is high, making it difficult for new entrants to gain market share. Instead, companies focus on maintaining their position and improving efficiency in their operations.

Question 13

Changes in the characteristics of a population,such as age or race,are irrelevant to the analysis of an industry's macroenvironment.

Accepted Answer

Changes in the characteristics of a population can have significant impacts on the macroenvironment of an industry. For example, an aging population may lead to increased demand for healthcare services or retirement communities, while changes in racial demographics can affect consumer preferences and market segmentation strategies.

Question 14

Interest rates have an impact on the sale of autos,appliances,and capital equipment and thus represent a macoeconomic force.

Accepted Answer

Interest rates can affect the cost of financing these types of purchases, making them more or less affordable for consumers and businesses, which can impact their decision to buy or invest. This can in turn impact the overall demand for these products and the industries that produce them, contributing to broader economic activity.

Question 15

Cosmetics makers focus on the unique needs of customers of different ages.The cosmetics makers recognize the importance of

Accepted Answer

Cosmetics makers focus on identifying and targeting specific market segments based on factors such as age, skin type, and beauty concerns. This allows them to tailor their products and marketing strategies to appeal to the unique needs and preferences of different customer groups.

Question 16

Which of the following is not a barrier to entry?

Accepted Answer

High customer bargaining power actually makes it easier for new firms to enter the market as they can negotiate better terms and prices with suppliers, which can help reduce costs and improve profitability. The other choices, including economies of scale, brand loyalty, absolute cost advantages, and high customer switching costs, can all create barriers to entry for new firms.

Question 17

Anheuser Busch,because it dominates the mass-market beer segment,does not complete with micro-brewers.

Accepted Answer

This statement is false. Anheuser Busch does compete with micro-brewers, as micro-brewers have gained a larger market share and have developed a loyal following among consumers who prefer craft beer over mass-market beer. Anheuser Busch has responded to this competition by acquiring some popular craft beer brands and even developing its own line of craft-style beers.

Question 18

If economies of scale are an industry's primary entry barrier,a new entrant's major risk is

Accepted Answer

If economies of scale are the primary entry barrier, established producers have cost advantages due to their ability to produce in large volumes. A new entrant may not be able to produce in sufficient volume to match their cost advantages, making it risky for them to enter the market.

Question 19

As a barrier to new entry,absolute cost advantages can be based on

Accepted Answer

Absolute cost advantages can be based on control over low-cost inputs required for production, which allows established companies to produce at lower costs than new entrants.

Question 20

An industry can be defined as a group of

Accepted Answer

An industry is typically defined as a group of companies offering products or services that are close substitutes for each other, meaning they are similar in nature and are competing for the same market. Option B specifies a numerical minimum that is not necessarily true, while options D and E define something that is not an industry. Option C is too broad and does not specify any characteristics of the companies.

Quiz 2: External Analysis: The Identification of Opportunities and Threats