The ________ consists of broad trends in the context in which a firm operates that can have an impact on a firm's strategic choices.
micro-environment
general environment
task environment
internal environment
All of the following are elements of the general environment except
technological trends.
demographic trends.
industrial trends.
cultural trends.
________ is/are the distribution of individuals in a society in terms of age, sex, marital status, income, ethnicity, and other personal attributes that may determine buying patterns.
Demographics
Economics
Technological trends
Culture
The values, beliefs and norms that guide behavior in a society are known as
climate.
demographics.
economics
culture.
When activity in an economy is relatively low for a short period of time, the economy is said to be in a
recession.
depression
prosperous cycle.
boom
Civil wars, political coups, terrorism, wars between countries, famines, and country or regional economic recessions are all examples of which element of the general environment?
demographics
specific international events
culture
In the S-C-P model, ________ refers to the strategies that firms in an industry implement
structure
strategy
conduct
performance
In a perfectly competitive industry
there are relatively few firms operating in the industry
the products and services sold by firms in the industry are very different from each other
it is very costly for firms to enter the industry
it is not very costly for firms to enter or exit the industry
Within the five forces framework, the five most common threats facing firms from their competitive environment include each of the following except
substitutes
complementors
suppliers.
buyers
Firms in industries characterized by ________ can expect to earn only competitive parity
perfect competition
monopolistic competition
oligopoly
monopoly
Which type of competition is characterized by a large number of firms, heterogeneous products and low cost of entry and exit?
Which type of competition is characterized by a small number of firms, homogeneous products and costly entry and exit?
A(n) ________ is any individual, group, or organization outside a firm that seeks to reduce the level of that firm's performance
environmental threat
environmental opportunity
environmental equalizer
competitive advantage
Firms that have either recently begun operations in an industry or that threaten to begin operations in an industry soon are considered to be ________ in the five forces framework
barriers to entry
new competitors
suppliers
________ exist when a firm's costs rise as a function of its volume of production
Economies of scale
Economies of scope
Diseconomies of scale
Learning curve effects
All other things being equal, which of the following would lead to lower barriers to entry in an industry
The existence of economies of scale in the industry
Products are highly differentiated in the industry
Industry incumbents have learning-curve cost advantages
Raw materials are widely and readily available at a competitive price
Frequent price cutting by firms in an industry, frequent introduction of new products by firms in an industry and intense advertising campaigns are indications of
high power of buyers.
high threat of new entrants
high levels of direct competition
high threat of substitutes.
The threat of direct competition tends to be high when
there are few firms in an industry and these firms tend to be unequal in size
the industry growth rate is higher
firms are unable to differentiate their products.
production capacity can be added in small increments
The products or services provided by a firm's direct competitors meet ________ customer needs in ________ ways as the product provided by the firm itself.
different; the same
approximately the same; the same
different; different
approximately the same; different
Which of the following statements regarding substitutes is accurate
In the extreme, substitutes can ultimately replace an industry's products or services
Substitutes place a floor on the prices firms in an industry can charge and on the profits firms in an industry can earn.
Substitutes rarely impact the profitability that firms in an industry can earn
The importance of substitutes in reducing the profit potential in a wide variety of industries is decreasing
________ make a wide variety of raw materials, labor and other critical assets available to firms
Rivals
Suppliers
Substitutes
Which of the following attributes makes suppliers a stronger threat?
The supplier's industry is dominated by a small number of firms
The product or service provided by suppliers is not highly differentiated
Suppliers are threatened by substitutes.
Suppliers are not able to engage in forward vertical integration
Which of the following is the best example of forward vertical integration
a car dealership opening up its own automobile manufacturing plant
a car company opening its own dealerships to sell its products directly to customers
a car company opening its own chain of video rental stores
a car company opening a plant to product motorcycles
Buyers tend to have less power when
a firm has only one buyer, or a small number of buyers
the products or services being sold to buyers are standard and not differentiated
the supplies they purchase are an insignificant portion of the costs of their final products
they are not earning significant economic profits
Overall, the average level of performance in an industry is likely to be highest when
the threat level of all five forces is high
the threat level of rivalry and substitutes is low, but the threat level of suppliers, buyers and new entrants is high.
the threat level of rivalry, substitutes and new entrants is high, but the threat level of buyers and supplies is low
the threat level of all five forces is low.
If your customers value your products more when they have your product and another firm's product rather than when they have your product alone, the other firm is considered to be a
competitor
complementor.
rival.
substitute.
An industry in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies is known as a(n) ________ industry
fragmented
consolidated
mature
emerging
The major opportunity facing firms in fragmented industries is
refining their current products and emphasizing an increase in service quality
developing new products and technologies
creating a first-mover advantage through technological leadership
the implementation of strategies that began to consolidate the industry into a smaller number of firms.
The advantages that come to firms that make important strategic and technological decisions early in the development of an industry are known as ________ advantages
first-mover
competitive
comparative
In general, first-mover advantages can arise from any of these sources except
technological leadership
preemption of strategically valuable assets.
the creation of customer switching costs
using an imitative strategy to introduce improved versions of competitors' new products
Mature industries are characterized by
an increase in total industry demand
faster increases in production capacity
a slowdown in the introduction of new products or services.
a decrease in the amount of international competition.
The most promising opportunity for a firm in a declining industry is to
establish itself as a first mover in the post-shakeout industry
become a market leader in the pre-shakeout industry
become a fast follower in the pre-shakeout industry
merge with another firm.
Firms in a declining industry that engage in a long, systematic phased withdrawal from the industry, extracting as much value as possible during the withdrawal period, are following a(n) ________ strategy
niche
expansion
divestment
harvest
Industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies are called ________ industries
declining
________ are advantages that come to firms that make important strategic and technological decisions early in the development of an industry
Visionary advantages
First-mover advantages
Comparative advantages
Missionary advantages
A consolidation strategy is a good option in what type of industry
________ are resources required to successfully compete in an industry.
Strategically valuable assets
Technological leader strategies
Process innovations
Product innovations
________ costs exist when customers make investments in order to use a firm's particular products or services
First-mover-switching
Technological leadership-switching
Customer-switching
Process-switching
Based on the above description, the hardwood furniture industry can best be described as a(n) ________ industry.
The level of direct competition in the hardwood furniture industry can best be described
low because of the numerous firms in the industry and the slowing growth rate
low because of the slowing growth rate and the competition from composite wood furniture
high because of the numerous firms in the industry and the slowing growth rate
moderate because the slowing growth rate offsets the numerous firms in the industry
The threat of suppliers in the hardwood furniture can best be described as
low because there are a large number of suppliers selling an undifferentiated product.
high because there are a large number of suppliers selling an undifferentiated product
moderate because the large number of suppliers is offset by the undifferentiated products they are selling
moderate because of the slowing growth rate in the industry and the commodity nature of the products produced by suppliers
If Hickory Divine were to open its own chain of furniture stores, this would be an example of
complementors.
backward vertical integration
consolidation.
forward vertical integration
In this example, composite wood furniture would be an example of a(n)
substitute
new entrant
The threat of buyers in this industry is best described as
high because there are many suppliers, none of which represents a significant portion of the hardwood furniture industry's sales.
low because of the slow industry growth and the commodity nature of the suppliers.
low because there are many suppliers, none of which represents a significant portion of the hardwood furniture industry's sales
high because of the slow industry growth and the commodity nature of the suppliers
Which of the following best describes the competition in the U.S. online auction industry
For BidBuy, services such as those offered by DollarDog that make BidBuy's services more valuable for customers who use the services of both companies are best described as
rivals
Factors such as BidBuy's feedback rating system that are valuable to the company's customers but which are not useful on other online auction sites are examples of
first-mover advantages.
customer-switching costs
BidBuy has a ________ advantage
visionary
global
The products or services provided by a firm's substitutes meet ________ customer needs in ________ ways as the product provided by the firm itself.
