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Commerce and BusinessbackBusinessbackStrategic ManagementbackStrategic ManagementbackPractice Set 2476back

External Analysis: Industry Structure,competitive Forces,and Strategic Groups

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Question 1
Free
Multiple Choice

Which of the following factors best contributes to the U.S.automotive industry being characterized by high entry barriers?

Choose correct answer/s
A

New auto companies create electric cars powered by simpler motors and gearboxes.

B

New entrants in the automotive industry expect that incumbents will not or cannot retaliate.

C

Car manufacturers require large-scale production in order to be cost-competitive.

D

Few industrial products are as easy to build as cars powered by internal combustion engines.

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Question 2
Free
Multiple Choice

The _____ allows the scanning,monitoring,and evaluating of changes and trends in a firm's macro environment.

Choose correct answer/s
A

VRIO framework

B

SWOT analysis

C

BCG matrix

D

PESTEL framework

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Question 3
Free
Multiple Choice

Which of the following external forces is a part of a firm's task environment?

Choose correct answer/s
A

the composition of the strategic group to which the firm belongs

B

the interest rates prevalent in the economy in which the firm operates

C

the inflation level in the economy in which the firm operates

D

the recent innovations in process technology, including lean manufacturing

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Question 4
Free
Multiple Choice

The government of Filvia has mandated that the standard minimum wage in the country be increased to $8,000 per year.This has ensured that all firms in the country pay their employees at least $8,000 per year,which has brought about a higher standard of living for the people of Filvia.Which of the following factors in a firm's general environment does this mandate best indicate?

Choose correct answer/s
A

ecological factors

B

sociocultural factors

C

technological factors

D

legal factors

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Question 5
Free
Multiple Choice

Which of the following represents an economic factor in a firm's external general environment?

Choose correct answer/s
A

the government regulations and laws in the country in which the firm exists

B

the stage of the business cycle that the country is in

C

the values and norms prevalent in the society in which the firm operates

D

the bargaining power of the firm's suppliers and buyers

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Question 6
Multiple Choice

Which of the following is an implication of low interest rates?

Choose correct answer/s
A
Cost of capital for firms will be high.
B
Firms will invest less in future growth.
C
Economic growth rate will fall.
D
Consumer demand will increase.
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Question 7
Multiple Choice

What is most likely to happen when there is too much money in an economy?

Choose correct answer/s
A
There are too many goods and services.
B
There is a drop in interest rates.
C
There is high economic growth.
D
There is an increase in prices.
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Question 8
Multiple Choice

In a firm's external environment, _____ primarily capture population characteristics related to age,gender,family size,ethnicity,sexual orientation,religion,and socioeconomic class.

Choose correct answer/s
A
political trends
B
demographic trends
C
ecological trends
D
economic trends
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Question 9
Multiple Choice

Which of the following do the sociocultural forces in a firm's external environment best represent?

Choose correct answer/s
A
the interest rates prevalent in an economy
B
the laws protecting small enterprises in a nation
C
the family size of the firm's target market
D
the rate of employee attrition within the firm
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Question 10
Multiple Choice

In 2008,BlackBerry's market cap peaked at $75 billion.By 2015 this valuation had fallen more than 90 percent,to less than $7 billion.BlackBerry fell victim to two important PESTEL factors in its external environment: sociocultural and technological.How did technology contribute to BlackBerry's decline?

Choose correct answer/s
A
BlackBerry failed to offer strong security features for its device.
B
BlackBerry failed to change its device into one that could perform multiple tasks effectively.
C
BlackBerry failed to adapt to a groundswell that involved workers bringing mobile devices to work.
D
BlackBerry failed to produce an efficient emailing system using a keyboard.
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Question 11
Multiple Choice

A firm's _____ relates to its ability to create value for customers (V)while containing the cost to do so (C).

Choose correct answer/s
A
strategic position
B
incumbency
C
threat of entry
D
attrition rate
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Question 12
Multiple Choice

The primary objective of Porter's five forces model is to

Choose correct answer/s
A
replace a firm's competitive advantage with competitive parity.
B
understand the profit potential of different industries.
C
reduce the gap between the value of a firm's product and its cost of production.
D
break down a firm's value chain activities into primary and support.
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Question 13
Multiple Choice

In the _____ developed by Michael Porter,competition is not defined narrowly as a firm's closest competitors but rather more broadly to include other factors in an industry like buyers,suppliers,potential new entry of other firms,and the threat of substitutes.

Choose correct answer/s
A
PESTEL framework
B
VRIO framework
C
five forces model
D
value chain analysis
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Question 14
Multiple Choice

Which of the following is a primary feature of the five forces model?

Choose correct answer/s
A
It is concerned exclusively about the intensity of rivalry among direct competitors.
B
It takes into account a firm's internal resources, capabilities, and core competencies.
C
It helps managers determine the changing speed of an industry or the rate of innovation.
D
It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.
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Question 15
Multiple Choice

A firm's strategic position is likely to be strong when

Choose correct answer/s
A
the entry barriers within the industry it operates in are low and the exit barriers are high.
B
its suppliers and vendors can easily forward integrate and buyers can backward integrate.
C
all the five forces in Porter's model are strong.
D
the gap between the value the firm's product generates and the cost to produce it is large.
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Question 16
Multiple Choice

Which of the following statements is not true about the five forces in Porter's competitive analysis model?

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A
The relative strengths of the five forces that shape competition are context-dependent.
B
The stronger the five forces in an industry, the greater the industry's profit potential.
C
Competition in the model is described as the tug-of-war between the five forces to capture as much as possible of the economic value created in an industry.
D
An analysis of the five forces provides the basis for how a firm should position itself to gain and sustain a competitive advantage.
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Question 17
Multiple Choice

Keeping in mind the five forces in the airline industry,which of the following best explains the situation in the industry?

Choose correct answer/s
A
Substitutes are readily available in the form of trains and buses, thus reducing the profit potential in the industry.
B
Suppliers have weak bargaining power because they offer products that are not differentiated.
C
Entry barriers in the industry are high resulting in hardly any new airlines popping up.
D
Consumers in the industry make decisions based on price, thus reducing the intensity of rivalry in the industry.
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Question 18
Multiple Choice

The telecom industry in the country of New Taria is an industry characterized by the presence of strong network effects,high brand loyalty,high economies of scale,and proprietary technology among incumbent firms.Thus,in the telecom industry,the

Choose correct answer/s
A
threat of substitutes is most likely high.
B
threat of new entrants is most likely low.
C
bargaining power of buyers is most likely low.
D
entry barriers are most likely nonexistent.
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Question 19
Multiple Choice

Which of the following is most likely an implication of new firms entering an industry?

Choose correct answer/s
A
The bargaining power of buyers will reduce.
B
The industry's overall profit potential and sales will increase.
C
The rivalry among existing competitors will reduce.
D
The incumbent firms will spend more to satisfy their existing customers.
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Question 20
Multiple Choice

Economies of scale are cost advantages that accrue for firms with

Choose correct answer/s
A
high fixed costs.
B
low employee turnover.
C
larger output.
D
high capital risks.
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