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Terms in this set (20)
Which of the following is not one of the questions that needs to be answered in thinking strategically about a company's industry and competitive environment?
What emerging opportunities and threats are evident in the industry environment?
In identifying an industry's dominant economic features, there is a need to consider such things as
market size and growth rate, the number of buyers, the scope of competitive rivalry, the number of rivals, demand-supply conditions, product innovation, the degree of product differentiation, the presence of scale economies and/or learning/experience curve effects, and the pace of technological change.
According to both the text discussion and the summary in Figure 3.4, which of the following is not among the factors that determine whether competitive rivalry among industry members is strong, moderate, or weak?
Whether industry members are vertically integrated and whether the industry is characterized by significant scale economies and rapid technological change
The rivalry among competing sellers in an industry intensifies
as the number of rivals increases and as they become more equal in size and competitive capability.
Factors that cause the rivalry among competing sellers to be weak include
strong buyer loyalty, rapid growth in buyer demand, and so many industry rivals that any one company's actions have little impact on the businesses of its rivals.
According to both the text discussion and the summary in Figure 3.5, competitive pressures associated with the threat of new entrants grow stronger when
industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence, when current industry members are unable or unwilling to strongly contest the entry of newcomers, and when a newcomer can reasonably expect to earn attractive profits.
Which of the following conditions generally raise the barriers to entering an industry?
High capital requirements, difficulties in building a network of distributors-retailers and securing adequate space on retailers' shelves, and the likelihood that industry incumbents will strongly contest the efforts of new entrants to gain a market foothold
Based on both the chapter discussion and the summary in Figure 3.6, competitive pressures stemming from substitute products are weaker when
substitutes are higher-priced, buyers don't believe substitute products have equal or better features, and buyers' costs of switching to substitutes are relatively high.
Which of the following is not a factor in determining whether the suppliers to an industry are a source of strong, moderate, or weak competitive pressures?
Whether the industry supply chain is global or mostly national, whether suppliers have a wide or narrow product line, and whether industry members place orders frequently or infrequently with suppliers
Which of the following is not a reason that industry rivals are often motivated to enter into strategic partnerships with key suppliers?
To reduce the bargaining power they face from buyers of their products
Whether the buyers of an industry's product have strong or weak bargaining leverage over the terms and conditions of sale depends on
whether buyers purchase in relatively large or small quantities, whether the costs of switching to competing brands or to substitute products are high or low, and how well informed buyers are about sellers' prices, products, and costs.
As a rule, the stronger the collective impact of the five competitive forces,
the lower the combined profitability of industry participants and the more "competitively unattractive" is the industry environment.
The task of driving forces analysis is to
identify what the driving forces are, assess whether the drivers of change are, on the whole, acting to make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.
Which of the following is not among the most common types of driving forces?
Ups and downs in interest rates, changes in the number of seller-supplier collaborative alliances, and changes in overall industry profitability
The procedure for constructing a strategic group map involves
1. identifying the competitive characteristics that differentiate firms' market positions and competitive approaches.
2. plotting the firms on a two-variable or two-dimensional map, drawing circles around those firms occupying about the same strategy space, and making the size of the circles for each
strategic group proportional to the size of its members' share of total industry sales revenues.
A strategic group map is a helpful analytical tool for
driving forces and competitive pressures favor some strategic groups and hurt others; and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each group's respective market positions.
Trying to determine what strategic moves rivals are likely to make next
entails understanding rivals' strategies, watching their actions on a regular basis, sizing up their strengths and weaknesses, gauging how well they are faring in the marketplace, assessing how much pressure they are under to improve their performance, and evaluating the relative merits of their strategic options and alternatives so as to better predict their likely next moves.
An industry's key success factors
concern 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—and sometimes between profit and loss.
Which of the following is not an important factor for company managers to consider in drawing conclusions about whether the industry presents an attractive opportunity?
How many of the industry's key success factors do companies in the industry typically incorporate into their strategies
Which one of the following statements is false?
A company's macro-environment includes all relevant external factors and influences that bear upon a company's decision to move to a different strategic group, change its strategic intent, or modify its objectives, strategy, or business model.
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