Crafting and Executing Strategy The Quest for Competitive Advantage Concepts and Cases 22th edition By Thompson- Test Bank
To Purchase this Complete Test Bank with Answers Click the link Below
If face any problem or
Further information contact us At tbzuiqe@gmail.com
Sample Test
Crafting and Executing Strategy, 22e (Thompson)
Chapter 3 Evaluating a Company’s External
Environment
1) The strategically relevant factors outside a company’s
industry boundaries—economic conditions, political factors, sociocultural
forces, technological factors, environmental factors, and legal/regulatory conditions—are
known as
1. A)
the industry and the competitive arena in which the company operates.
2. B)
general economic conditions plus the factors driving change in the markets
where a company operates.
3. C) a
company’s macro-environment.
4. D)
the competitive market environment that exists between a company and its
competitors.
5. E)
the dominant economic features of a company’s industry.
2) Managers must chart a company’s strategic course by
1. A)
focusing on the local environment in which they are operating.
2. B) ensuring
excess production capacity and/or inventory.
3. C)
competing fiercely for a share in the market.
4. D)
building a bigger dealer network.
5. E)
developing a thorough understanding of the company’s external and internal
environment.
3) The homebuilding industry is not affected by such macro-influences
as
1. A)
changes in mortgage interest rates, rules, and regulations that make it
easier/harder for homebuyers to obtain mortgages.
2. B)
trends in household incomes and buying power.
3. C)
the distinctive competences of incumbent firms.
4. D)
disasters and other unanticipated events in the natural environment.
5. E)
shifting preferences of families for renting versus owning a home, and/or homes
of various sizes, styles, and price ranges.
4) Which of the following is not one of the principal components of
strategic significance in the PESTEL analysis?
1. A)
political factors including the extent to which government intervenes in the
economy
2. B)
economic conditions that include the general economic climate and specific factors
such as interest rates, inflation rate, and unemployment rate, as well as
conditions in the stock and bond markets that can affect consumer confidence
3. C)
sociocultural forces that include societal values, attitudes, cultural factors,
and lifestyles that impact business
4. D)
technological factors that include the pace of change and technical
developments that have the potential for impacting society
5. E)
environmental forces that include the competitive structure, the degree of
industry fragmentation, and the mobility barriers that inhibit business
5) The biggest strategy-shaping impact on on-demand
transportation providers such as Uber and Lyft is most likely to be
1. A)
Yellow Cab companies launching mobile app campaigns for community-connect and
awareness.
2. B)
Amazon launching a mobile delivery service via drones.
3. C)
Apple launching a global network of driverless cars, buses, and trucks on
demand via a mobile app.
4. D)
Tesla and ZipCar announcing a joint venture for electric automobile sharing
services.
5. E)
Greyhound developing and marketing a mobile app for customers to purchase
intercity bus tickets.
6) A strategically relevant political factor in the
macro-environment that will influence the performance of all firms across the
board is most likely to
be
1. A)
the strength of the federal banking system.
2. B)
the exogenous forces related to the general environmental demand.
3. C)
social factors that could fuel a political agenda and create greater
transparency.
4. D)
bailouts and energy policies that are industry specific.
5. E)
tax policy, fiscal policy, and tariffs providing impetus for antitrust matters.
7) Avon Products at one point secured information about its
biggest rival, Mary Kay Cosmetics, by having its personnel search through the
garbage bins outside MKC’s headquarters. This is an example of
1. A)
how companies in an industry can sustain good track records for revenue growth
and profitability.
2. B)
strategic moves rivals are likely to make next.
3. C)
industry key factors for future competitive success.
4. D)
lawful gathering of competitive intelligence.
5. E)
lawful but probably unethical gathering of competitive intelligence.
8) The impact of the macro-environment on a company’s strategic
opportunities is not exemplified
by the following situation?
1. A)
Sales of Stolichnaya Vodka in the United States dwindle on account of a boycott
of Russian products.
2. B)
Consumer confidence in Volkswagen drops precipitously because of falsified
emissions data.
3. C)
Netflix squares off with Amazon Prime as its most potent rival in the streaming
television and film industry.
4. D)
Traffic increases at the outlets of Whole Foods following its introduction of
stores comprised solely of generic products.
5. E)
Sales of FitBit surge on account of a new feature that monitors users’ blood
pressure.
9) The most powerful and widely used conceptual tool for
diagnosing the principal competitive pressures in a market is
1. A)
the five forces framework.
2. B)
PESTEL.
3. C)
the driving forces model.
4. D)
strategic group mapping.
5. E)
SWOT analysis.
10) The competitive pressures on companies within an industry
come from all of the following except
1. A)
those associated with the market maneuvering and jockeying for buyer patronage
that goes on among rival firms in the industry.
2. B)
those companies in other industries attempting to win buyers over to their
substitute products.
3. C)
those associated with the threat of new entrants into the marketplace.
4. D)
those associated with the bargaining power of suppliers and customers.
5. E)
those associated with environmental factors such as water shortages.
11) The five forces of competitive pressures do not include
1. A)
the power and influence of social/demographic trends.
2. B)
the bargaining power of suppliers and seller-supplier collaboration.
3. C)
the threat of new entrants into the market.
4. D)
the attempts of companies in other industries to win customers over to their
own substitute products.
5. E)
the market maneuvering and jockeying for buyer patronage that goes on among
rival sellers in the industry.
12) Market maneuvering and jockeying for buyer patronage that
goes on among rival sellers in the industry
1. A) is
less strong than the competitive pressures that stem from the ready
availability of attractively priced substitute products.
2. B) is
the strongest force among the five forces that drive profitability in an
industry.
3. C)
emerges from close collaboration with suppliers and the competitive pressures
that such collaboration creates.
4. D) is
less important than competitive pressure associated with the potential entry of
new competitors.
5. E)
has about the same impact as bargaining power and leverage that large customers
are able to exercise.
13) Using the five forces model of competition to determine the
character and strength of the competitive forces within a given industry
involves
1. A)
building the picture of competition in three steps: (1) identify the different
parties involved, along with specific factors that bring about competitive
pressures; (2) evaluate how strong the pressures stemming from each of the five
forces are (strong, moderate or weak); and (3) determine whether the collective
impact of the five competitive forces is conducive to earning attractive
profits in the industry.
2. B)
building the picture of competition in two steps: (1) determine which rival has
the biggest competitive advantage and (2) assess whether the competitive
advantages possessed by various industry members allow most industry members to
earn above-average profits.
3. C)
evaluating whether competition is being intensified or weakened by the
industry’s driving forces and key success factors.
4. D)
assess whether the collective impact of all five forces is weak enough to allow
industry members to go on the offensive or use a defensive strategy to insulate
against fierce competitive pressures.
5. E)
gauging the overall strength of competition based on how many industry rivals
are operating with a competitive advantage and how many are operating at a
competitive disadvantage.
14) What makes the marketplace a competitive battlefield?
1. A)
the race of industry members to build strong defenses against the industry’s
driving forces
2. B)
the constant rivalry of firms to strengthen their standing with buyers and win
a competitive edge over rivals
3. C)
the ongoing race among rival sellers to have the highest-quality product
4. D)
the ongoing efforts of industry members to introduce new and improved
products/services at a faster rate than their rivals
5. E)
the ongoing race among rivals to achieve the fastest rate of growth in revenues
and profits
15) Market maneuvering among industry rivals
1. A)
determines whether the industry’s strategic group map will be static or
dynamic.
2. B)
centers around collaborative efforts to overcome the bargaining power of
powerful suppliers and powerful buyers.
3. C) is
usually an industry’s strongest driving force.
4. D) is
usually one of the two or three weakest competitive forces because of the close
familiarity that rivals have for one another’s likely next moves.
5. E) is
ongoing and dynamic, with moves and countermoves of rivals producing a
continually evolving competitive landscape that delivers winners and losers.
16) Rivalry among competing sellers decreases
1. A)
when buyer demand is growing rapidly.
2. B) as
it becomes less costly for buyers to switch brands.
3. C) as
the products of rival sellers become commoditized.
4. D)
when there is excess production relative to demand.
5. E) as
the number of competitors increases.
17) External forces in the natural environment include
1. A)
the trend toward healthier lifestyles, which can shift spending toward exercise
equipment and health clubs and away from alcohol and snack foods.
2. B)
air and/or water pollution, the depletion of irreplaceable natural resources,
or inefficient energy/resource usage.
3. C)
interest rates, exchange rates, the inflation rate, the unemployment rate, the
rate of economic growth, trade deficits or surpluses, savings rates, and
per-capita domestic product.
4. D)
tax policy, fiscal policy, tariffs, the political climate, and the strength of
institutions such as the federal banking system.
5. E)
slow growth in buyer demand.
18) Legal and regulatory factors in the external environment
typically do not include
1. A)
minimum wage legislation in low-wage industries (such as nursing homes and fast
food restaurants) that employ substantial numbers of relatively unskilled
workers.
2. B)
consumer protection statutes
3. C)
genetic engineering, nanotechnology, and solar energy technology.
4. D)
antitrust laws.
5. E)
occupational health and safety regulations specific to certain industries, such
as meatpacking and coalmining, where jobs are hazardous or carry high risk of
injury
19) Rivalry among competing sellers is generally less intense
when
1. A)
there are relatively more industry key success factors.
2. B)
the industry’s driving forces are weak and rivals have mostly commodity
products.
3. C)
barriers to entry are moderately low and the pool of likely entry candidates is
large.
4. D)
rivals are wary of making fresh moves to lower prices, introduce new products,
increase promotional efforts and advertising, and otherwise gain sales and
market share.
5. E)
buyers have many alternative products or services from which to choose.
20) The competitive battles among rival sellers striving for
better market positions, higher sales and market shares, and competitive
advantage, suggest the rivalry force
1. A) is
stronger when firms strive to be low-cost producers than when they use
differentiation and focus strategies.
2. B) is
often weak when rivals have emotional stakes in business or face high exit
barriers.
3. C) is
largely unaffected by whether industry conditions tempt rivals to use price
cuts or other competitive weapons to boost unit sales.
4. D)
tends to intensify when strong companies with sizable financial resources,
proven competitive capabilities, and respected brand names hurdle entry
barriers looking for growth opportunities and launch aggressive, well-funded
moves to transform into strong market contenders.
5. E) is
weaker when more firms have weakly differentiated products, buyer demand is
growing slowly, and buyers have moderate switching costs.
21) In analyzing the strength of competition among rival firms,
an important consideration is
1. A)
the potential for buyers to exercise strong bargaining power.
2. B)
the diversity of competitors in terms of long-term direction, objectives,
strategies, and countries of origin.
3. C)
the number of firms pursuing differentiation strategies versus the number
pursuing low-cost leadership strategies and focus strategies.
4. D)
the extent to which some rivals have more than two competitively valuable
competencies or capabilities.
5. E)
whether the industry is characterized by a strong learning/experience curve and
whether the industry is composed of many or few strategic groups.
22) The intensity of rivalry among competing sellers does not depend on
whether
1. A)
the industry has more than two strong driving forces and whether the industry
has more than two diverse and capable strategic groups.
2. B)
competitors are diverse in terms of long-term directions, objectives,
strategies, and countries of origin.
3. C)
strong companies outside the industry have acquired weak firms in the industry
and are launching aggressive moves to transform the acquired companies into
strong market contenders.
4. D)
one or two rivals have particularly powerful and successful strategies to grow
the business, attract and retain buyers, and develop a sustained competitive
advantage.
5. E)
industry conditions attract industry members to use price cuts or other
competitive weapons to boost total sales volume and market share.
23) In which of the following instances is rivalry among
competing sellers not more
intense?
1. A)
when certain competitors are dissatisfied with their market position and make
moves to bolster their standing
2. B)
when strong companies outside the industry acquire weak firms in the industry
and launch aggressive moves to transform their newly acquired competitors into
stronger market contenders
3. C)
when competitors are fairly equal in size and capability
4. D)
when the products of rivals are weakly differentiated, buyer switching costs
are low, and market demand is growing slowly
5. E)
when there are vast numbers of small rivals so the impact of any one company’s
actions is spread thinly across all industry members
24) Competing companies deploy whatever means necessary to
strengthen market position, including all of the following except
1. A)
marketing tactics that include special sales promotions such as introducing new
or improved features or increasing the number of styles to provide greater
product selection.
2. B)
differentiating their products by offering better performance features than
rivals.
3. C)
improving innovation to increase product performance and quality.
4. D)
making efforts to expand dealer networks.
5. E)
reducing distribution capabilities and market presence.
25) Which of the following is generally not considered a
barrier to entry?
1. A)
restrictive regulatory policies
2. B)
high capital requirements
3. C)
strong brand preferences
4. D)
many industry patents in place
5. E)
weak network effects in customer demand
26) Potential entrants are more likely to be deterred from
actually entering an industry when
1. A)
incumbent firms are willing and able to be aggressive in defending their market
positions against entry.
2. B)
incumbent firms are complacent.
3. C)
buyers are not particularly price-sensitive and the industry already contains a
dozen or more rivals.
4. D)
the relative cost positions of incumbent firms are about the same, such that no
one incumbent has a meaningful cost advantage.
5. E)
buyer switching costs are moderately low because of strong product
differentiation among incumbent firms.
27) Competitive pressures associated with the threat of entry
are greater in all of the following situations except when
1. A)
incumbent firms are willing to strongly contest the entry of newcomers with
moves designed to make entry unprofitable.
2. B) a
large pool of potential entrants exists, some of which have the capabilities to
overcome high entry barriers.
3. C) entry
barriers are relatively low and buyer demand for the product is growing
rapidly, and newcomers can expect to earn attractive profits without inviting a
strong reaction from incumbents.
4. D)
existing industry members are looking to expand their market reach by entering
product segments or geographic areas where they currently do not have a
presence.
5. E)
customers have low brand preferences and low degrees of loyalty to seller.
28) The best test of whether potential entry is a strong or weak
competitive force is
1. A)
the strength of buyer loyalty to existing brands.
2. B)
whether the industry’s driving forces make it harder or easier for new entrants
to be successful.
3. C)
whether the strategies of industry members are well-matched to the industry’s
key success factors.
4. D)
whether there are any vacant spaces on the industry’s strategic group map.
5. E) to
ask if the industry’s growth and profit prospects are strongly attractive to
potential entry candidates.
29) The competitive threat that outsiders will enter a market is
weaker when
1. A)
financially strong industry members send strong signals that they will launch
strategic initiatives to combat the entry of newcomers.
2. B)
the industry’s market growth is rapid.
3. C)
the pool of entry candidates is large and some have resources that would make
them formidable market contenders.
4. D)
newcomers can be expected to earn attractive profits.
5. E)
buyers have little loyalty to the brands and product offerings of existing
industry members.
30) Which of the following is not a good example of a substitute
product that triggers stronger competitive pressures?
1. A) a
salad as a substitute for French fries
2. B)
wireless phones as a substitute for wired telephones
3. C)
Coca-Cola as a substitute for Pepsi
4. D)
snowboards as a substitute for snow skis
5. E)
video-on-demand services from a cable TV company as a substitute for going to
the movies
31) The competitive pressures from substitute products tend to
be stronger when
1. A)
good substitutes are readily available.
2. B)
there are fewer number of substitute products.
3. C)
substitutes have lower performance features.
4. D)
buyers incur high costs in switching to substitutes.
5. E)
substitutes are priced above the market.
32) In which of the following instances are industry
members not subject
to stronger competitive pressures from substitute products?
1. A)
The costs to buyers of switching over to the substitutes are low.
2. B)
Buyers are dubious about using substitutes.
3. C)
The quality and performance of the substitutes are well-matched to what buyers
need to meet their requirements.
4. D)
Buyer brand loyalty is weak.
5. E)
Substitutes are readily available at competitive prices.
33) Determining how strong the threat of substitutes will be
entails
1. A)
identifying the relative price/performance relationship of the substitutes, the
switching costs, and the overall buyer demand for the substitute.
2. B)
identifying the attractiveness of other industries.
3. C)
measuring Coke as a substitute for Pepsi and applying dynamic simulation
modeling techniques.
4. D) adopting
a substitute product concentration factor to the buyer volume.
5. E)
judging whether industry members are capable of self-manufacturing their
products.
34) The lower the user’s switching costs, the
1. A)
harder it is for the sellers of attractive substitutes to lure buyers to their
offering.
2. B)
more intense the competitive pressures posed by substitute products.
3. C)
less intense the competitive pressures posed by substitute products.
4. D)
greater the bargaining power from both suppliers and influential customers.
5. E)
lesser the bargaining power from both suppliers and influential customers.
35) Whether supplier-seller relationships in an industry
represent a strong or weak source of competitive pressure is a function of
1. A)
whether the profits of suppliers are relatively high or low.
2. B)
the average number of suppliers that each seller/industry member purchases
from.
3. C)
how aggressively rival industry members are trying to differentiate their
products.
4. D)
whether demand for supplier products is high and they are in short supply.
5. E)
whether the prices of the items being furnished by the suppliers are rising or
falling.
36) The strength of competitive pressures that suppliers can
exert on industry members is MAINLY a function of
1. A)
whether needed inputs are in short supply and whether suppliers provide
differentiated input that enhances performance of the product.
2. B)
whether suppliers self-manufacture what they supply or source their items from
other manufacturers.
3. C)
whether the industry’s position in the growth cycle is favorable.
4. D)
whether technological change in the businesses of suppliers is rapid or slow.
5. E)
whether the needs and expectations of supplier-seller relationships are
changing slowly or rapidly.
37) The bargaining leverage of suppliers is greater when
1. A)
the suppliers’ products/services account for a small percentage of industry
members’ costs.
2. B)
industry members incur low costs in switching their purchases from one supplier
to another.
3. C)
industry members account for a big fraction of supplier’s sales.
4. D)
there is extensive seller-supplier collaboration.
5. E)
the supplier industry is composed of a large number of relatively small
suppliers.
38) In which one of the following instances is supplier
bargaining power and leverage not weakened?
1. A)
when industry members pose a credible threat of backward integration into the
business of suppliers
2. B)
when the cost of switching from one supplier to another is low
3. C)
when the items purchased from suppliers are in short supply
4. D)
when the buying firms purchase in large quantities and thus are important
customers of the suppliers
5. E)
when the item being supplied is a commodity
39) When an industry member is a major customer of the supplier,
and the relationship (partnership) is unusually effective and mutually
advantageous
1. A) it
is rare for such partnerships to have much competitive impact on those industry
members not having such partnerships.
2. B)
one unfortunate outcome is that it tends to give the supply partners much
enhanced bargaining power in their dealings with these industry members.
3. C)
there is a strong likelihood such partnerships will put increased competitive
pressure on those industry members who lack productive collaborative
relationships with their suppliers.
4. D)
there is a high likelihood of such partnerships reducing competitive pressures
on all industry
members, provided technological change in the suppliers’ business is rapid and
the item being supplied is a commodity.
5. E)
the usual result is to reduce competitive pressures on all industry members,
provided the costs of the items furnished by supply chain partners amount to 50
percent or more of total cost.
40) The higher the switching costs for industry members, the
more it can
1. A) limit
supplier bargaining power.
2. B)
enhance supplier bargaining power.
3. C)
enhance the quality of parts and components being supplied, and in effect
reduce defect rates.
4. D)
provide important cost savings for the collaborative supplier-seller
relationship.
5. E) limit
the supply of products and/or services.
41) Whether buyer-seller relationships in an industry represent
a strong or weak source of competitive pressure is a function of
1. A)
the speed with which general economic conditions and interest rates are changing.
2. B)
the extent to which buyers can exercise enough bargaining power to influence
the conditions of sale in their favor and whether strategic partnerships
between certain industry members can adversely affect other industry members.
3. C)
how many buyers purchase all of their requirements from a single seller versus
how many purchase from several sellers.
4. D)
the number of buyers versus the number of sellers.
5. E)
whether industry members are spending more or less on advertising.
42) Whether buyer bargaining power poses a strong or weak source
of competitive pressure on industry members depends in part on
1. A)
the degree to which buyers have any bargaining preferences and the extent to
which buyers are price sensitive.
2. B)
how many buyers are engaged in collaborative partnerships with sellers.
3. C)
whether entry barriers are high or low and the size of the pool of likely entry
candidates.
4. D)
whether the overall quality of the items being furnished by industry members is
rising or falling.
5. E)
whether demand-supply conditions represent a buyer’s market or a seller’s
market.
43) Which of the following is not a factor that causes buyer
bargaining power to be stronger?
1. A)
Some buyers are a threat to integrate backward into the business of sellers and
become an important competitor.
2. B)
Buyers are small and numerous relative to sellers.
3. C)
Buyers have considerable discretion over whether and when they purchase the
product.
4. D)
Buyers purchase the item frequently and are well-informed about sellers’ products,
prices, and costs.
5. E)
The costs incurred by buyers in switching to competing brands or to substitute
products are relatively low.
44) Buyer bargaining power is stronger when
1. A)
winning the business of certain high-profile customers offers a seller important
market exposure or prestige.
2. B)
the extent and importance of collaborative partnerships and alliances between
particular sellers and buyers are credible.
3. C)
buyers cannot integrate backward into the product market of sellers.
4. D)
sellers’ products are differentiated, making it easy and inexpensive for buyers
to switch to competing brands.
5. E)
the industry’s products are standardized or undifferentiated.
45) Which of the following factors is not a relevant
consideration in determining the strength of buyer bargaining power?
1. A)
the relationship between the buyer market and seller market
2. B)
the degree to which the seller is a manufacturer of goods and services in
substantial quantities
3. C)
the degree to which buyers pose a credible threat to integrate backward into
the product market of sellers
4. D)
the degree to which buyers are well-informed about a seller’s products, prices,
and costs
5. E)
the degree to which industry goods are standardized and undifferentiated
46) Collaborative relationships between particular sellers and
buyers in an industry can represent a source of strong competitive pressure
when
1. A)
virtually all buyers have strong brand attachments and are highly brand loyal.
2. B)
demand for the product is growing rapidly.
3. C)
sales are made to buyer groups with either strong bargaining power or high
sensitivity.
4. D)
sellers are racing to add the latest and greatest performance features so as to
attract the patronage of important or prestigious buyers.
5. E)
buyers are very quality conscious.
47) In which of the following circumstances are competitive
pressures associated with the bargaining power of buyers relatively
moderate-to-weak?
1. A)
The supply of soccer balls increases during the World Cup season.
2. B)
Consumers can easily compare different smartphones’ features over the Internet
before buying them.
3. C)
Apple designs and manufactures its chip processors rather than buying them from
Intel.
4. D)
Dairy products are usually standardized and therefore differentiated only by
price.
5. E) Buyers
tend to delay purchases of luxury goods, such as home entertainment systems,
until they are on sale.
48) Competitive pressures stemming from buyer bargaining power
tend to be weakest in which of the following circumstances?
1. A)
Most consumers vary the brands they choose for their cookware and kitchen
gadgets.
2. B)
There is a global decline in the demand for cable television services.
3. C)
The commercial jet aviation manufacturing industry offers highly differentiated
products.
4. D)
The Internet offers a huge amount of information on a variety of products.
5. E)
Heinz owns a metal-can manufacturing subsidiary to cut back on supplier costs.
49) Which of the following conditions acts to weaken buyer
bargaining power?
1. A)
when buyers are unlikely to integrate backward into the business of sellers
2. B)
when buyers purchase the item frequently and are well-informed about sellers’
products, prices, and costs
3. C)
when the costs incurred by buyers in switching to competing brands or to
substitute products are relatively low
4. D)
when the products of rival sellers are weakly differentiated and buyers have
considerable discretion over whether and when they purchase the product
5. E)
when buyers are few in number and/or often purchase in large quantities
50) Buyers are in position to exert strong bargaining power in
dealing with sellers when
1. A)
their costs to switch to competing brands or to substitute products are
relatively high.
2. B) a
particular seller’s product delivers quality or performance that is very important
to the buyer and is not matched by other brands.
3. C)
they buy the product infrequently or in small quantities and are not
particularly well-informed about sellers’ products, prices, and costs.
4. D)
buyer demand is growing rapidly.
5. E)
buyers are price sensitive because the product represents a significant portion
of their purchasing budget.
51) Which of the following factors is not a relevant
consideration in judging whether buyer bargaining power is relatively strong or
relatively weak?
1. A)
whether certain customers offer sellers important market exposure or prestige
2. B)
whether customers are relatively well-informed about sellers’ products, prices,
and costs
3. C)
whether buyer needs and expectations are changing rapidly or slowly
4. D)
whether sellers’ products are highly differentiated, making it troublesome or
costly for buyers to switch to competing brands or to substitute products
5. E)
whether buyers pose a major threat to integrate backward into the product
market of sellers
52) Not all buyers of an industry’s product have equal degrees
of bargaining power with sellers because
1. A)
sellers in an industry provide similar products and generally their cost
structures are different because of competitive advantages in their operation.
2. B)
some sellers may be less sensitive than others to price, quality, or service
differences.
3. C)
along the various stages of the value chain sellers are conducive to earning
attractive profits.
4. D)
the industry is a highly cohesive structure with limited fragmentation and few industry
members.
5. E)
sellers are large and few in number relative to the number of buyers.
53) A competitive environment where there is weak to moderate
rivalry among sellers, high entry barriers, weak competition from substitute
products, and little bargaining leverage on the part of both suppliers and
customers
1. A)
lacks powerful driving forces.
2. B)
gives each industry competitor the best potential for building sustainable
competitive advantage over rival firms.
3. C)
makes it challenging for industry members to compete successfully unless they
can strongly differentiate their products.
4. D) is
conducive to industry members earning attractive profits.
5. E)
requires that industry members have low costs in order to be competitively
successful.
54) A competitive environment where there is strong rivalry
among sellers, low entry barriers, strong competition from substitute products,
and considerable bargaining leverage on the part of both suppliers and
customers
1. A) is
competitively unattractive from the standpoint of earning good profits.
2. B)
offers little ability to build a sustainable competitive advantage.
3. C) is
highly conducive to achieving strong product differentiation and high customer
loyalty to the company’s brand.
4. D)
offers moderate to good prospects for making a reasonable profit and building a
sustainable competitive advantage.
5. E)
requires that industry members have a strongly differentiated product offering
in order to be profitable.
55) The stronger the collective impact of competitive pressures
associated with the five competitive forces,
1. A)
the stronger are the industry’s driving forces.
2. B)
the greater number of companies that can achieve a competitive advantage via
differentiation.
3. C)
the larger the number of competitive advantage opportunities for industry
members.
4. D)
the greater the number of industry key success factors.
5. E)
the fewer companies that can achieve a competitive advantage via anything other
than being the industry’s low-cost leader.
56) Based on an analysis of the five competitive forces, in
which of the following industries is profitability likely to be lowest?
1. A)
pharmaceuticals
2. B)
wireless lighting systems
3. C)
wearable fitness and health monitors
4. D)
pizza restaurants
5. E)
delivery services using drones
57) Based on an analysis of the five competitive forces, in
which of the following industries is profitability likely to be highest?
1. A)
apparel
2. B)
tire manufacturing
3. C)
electric and gas utilities
4. D)
commercial airlines
5. E)
video streaming services
58) As a rule, the collective impact of competitive pressures
associated with the five competitive forces
1. A)
determines the strength of the industry’s driving forces.
2. B)
determines the extent of the competitive pressure on industry profitability.
3. C)
means that fewer companies can achieve a competitive advantage via anything
other than being the industry’s low-cost leader.
4. D)
means there will be a larger number of competitive advantage opportunities for
industry members.
5. E)
means there will be a greater number of industry key success factors.
59) A company’s strategy is increasingly effective the more it
can match the company strategy to competitive conditions, so the firm can
1. A)
pursue avenues that expose the firm to as many of the different competitive
pressures as possible.
2. B)
shift the competitive battle in favor of the firm by altering the underlying
factors driving the five forces.
3. C)
pursue ways to identify and complement the five forces’ contradictions and
inferences to attract competitive growth opportunities.
4. D)
pursue avenues that promote strategic thinking about how to contest competitor
strengths and weaknesses and to create a checklist of potential profitability
preferences.
5. E)
shift societal concerns, attitudes, and lifestyles by altering the pattern of
competition.
60) The value net framework includes an analysis of
1. A)
the firm, substitutes, suppliers, customers, and competitors.
2. B)
the firm, suppliers, customers, competitors, and driving forces.
3. C)
substitutes, suppliers, customers, competitors, and driving forces.
4. D)
the firm, suppliers, customers, competitors, and complementors.
5. E)
substitutes, suppliers, customers, competitors, and potential entrants.
61) Which of the following is not an example of a complementor?
1. A)
microprocessors and laptops
2. B)
automobiles and gasoline stations
3. C)
theme parks and hotels
4. D)
gyms and fitness equipment
5. E)
newspapers and Internet news providers
62) The “driving forces” in an industry
1. A)
are usually triggered by changing technology or stronger learning/experience
curve effects.
2. B)
usually are spawned by growing demand for the product, the outbreak of
price-cutting, and big reductions in entry barriers.
3. C)
are major underlying causes of changing industry and competitive conditions and
have the biggest influences in reshaping the industry landscape and altering
competitive conditions.
4. D)
appear when an industry begins to mature but are seldom present during early
stages of the industry life cycle.
5. E)
are usually triggered by shifting buyer needs and expectations or by the
appearance of new substitute products.
63) Industry conditions change because of
1. A)
such powerful driving forces as swings in buyer demand, changing interest
rates, ups and downs in the economy, and higher/lower entry barriers.
2. B)
newly emerging industry threats and industry opportunities that alter the
composition of the industry’s strategic groups.
3. C)
newly emerging industry key success factors.
4. D)
important forces enticing or pressuring certain industry participants (competitors,
customers, suppliers) to alter their actions in important ways.
5. E)
changes in the barriers to entry and the degree of competition from substitute
products.
64) You have been asked to analyze the Value Net of the major
regions of the California wine industry and have observed close relationships
between wineries and local hospitality businesses (such as restaurants and
lodging facilities) in the regions under study. Those local hospitality
businesses can be said to be
1. A)
cohabitors.
2. B)
competitors.
3. C)
cooperators.
4. D)
complementors.
5. E)
customers.
65) One of the steps of driving-forces analysis is to identify
which
1. A)
strategy changes a company may need to make to prepare for the impacts of the
driving forces.
2. B)
strategic group is the most powerful.
3. C)
industry member is likely to become (or remain) the industry leader and why.
4. D)
key success factors are most likely to help their company gain a competitive
advantage.
5. E) of
the five competitive forces will be the strongest driver of industry change.
66) Which of the following is not generally a “driving force”
capable of producing fundamental changes in industry and competitive
conditions?
1. A)
changes in the long-term industry growth rate
2. B)
increasing globalization of the industry
3. C)
product innovation and technological change
4. D)
movement in the economy and in interest rates
5. E)
regulatory influences and government policy changes
67) Which of the following is most unlikely to qualify
as driving forces?
1. A)
changes in the long-term industry growth rate, the entry or exit of major
firms, and changes in cost and efficiency
2. B)
increasing globalization of the industry and product innovation
3. C)
new Internet technology applications, new government regulations, and
significant changes in government policy toward the industry
4. D)
increasing efforts to collaborate with suppliers via strategic alliances and
partnerships, escalating risk levels and normalization of cost and efficiency
in the industry
5. E)
marketing innovations and changes in who buys the industry’s product and how
they use it
68) Which of the following does not qualify as potential driving
forces capable of inducing fundamental changes in industry and competitive
conditions?
1. A)
changes in who buys the product and how they use it, and changes in the
long-term industry growth rate
2. B)
changes brought about by the entry or exit of major firms, product innovation,
and marketing innovation and cost efficiency
3. C)
changes in the economic power and bargaining leverage of customers and suppliers,
growing supplier-seller collaboration, and growing buyer-seller collaboration
4. D)
changes in buyer preferences for differentiated products instead of mostly
standardized or identical products
5. E)
changes in economies of scale and experience curve effects brought on by
changes in manufacturing technology and new Internet capabilities
69) Which of the following is most. likely to qualify as a driving
force?
1. A)
increases in price cutting by rival sellers and the launch of major new
advertising campaigns by one or more rivals
2. B)
successful introduction of innovative new products or new ways to market
products
3. C) an
increase in the prices of substitute products
4. D)
decisions on the part of industry’s three biggest competitors not to pursue a
strategy of striving to be the industry’s low-cost leader
5. E)
decisions by one or more outsiders not to attempt to enter the industry
70) Which of the following is not a common type of driving force?
1. A)
reductions in uncertainty and business risk
2. B)
changing societal concerns, attitudes, and lifestyles
3. C)
diffusion of technical know-how across companies and countries
4. D)
increasing efforts to collaborate closely with suppliers
5. E)
advances in technology and manufacturing process innovation
71) Increasing globalization of the ride-share industry can be a
driving force because
1. A)
the services provided by foreign ride-share competitors are nearly always
cheaper or of better quality than those of domestic companies.
2. B)
foreign ride-share operators typically have lower costs, more technological
expertise, and greater social network integration capabilities than domestic
firms.
3. C)
ride-share companies need to spread their operating reach into more and more
country markets to meet emerging consumer demand and take advantage of
available operating opportunities.
4. D) it
results in ride-share companies having fewer competitors and a strategic group
map with fewer circles.
5. E)
market growth rates rise, product innovation accelerates, and new ride-share
startups are increasingly likely to enter the industry.
72) Driving-forces analysis helps managers identify whether
1. A)
the collective impact of the driving forces will act to increase/decrease
market demand, increase/decrease competition, and raise/lower industry profitability
in the years ahead.
2. B) it
will become more or less important to aim the company’s strategy at being the
industry’s low-cost producer.
3. C)
the driving forces will have a bigger impact on company profitability than
competitive forces.
4. D)
the industry is likely to become more or less vertically integrated and why.
5. E)
competitive advantages are likely to grow or diminish in importance.
73) Evaluating the industry’s driving forces, as a whole,
requires understanding their influence on the attractiveness of industry
environment and generally are
1. A)
determined by the sizes of strategic groups and the power of rival firms’
competitive strategies.
2. B)
defined in ways that will strengthen or weaken market demand, competition, and
industry profitability in future years.
3. C)
the cause of a reduction in the bargaining power of buyers.
4. D)
triggered by movement in the economy, higher or lower interest rates, or
important new strategic alliances.
5. E)
triggered by such factors as growing competitive pressures from substitute
products, and the efforts of rival firms to employ new or different offensive
strategies.
74) In analyzing driving forces, the strategist’s role is to
1. A)
identify the driving forces and evaluate their impact on demand for the industry’s
product, the intensity of competition, and industry profitability.
2. B)
predict future marketing innovations and how fast the industry is likely to
globalize.
3. C)
evaluate what stage of the life cycle the industry is in and when it is likely
to move to the next stage.
4. D)
determine who is likely to exit the industry and what changes can be expected
in the industry’s strategic group map.
5. E)
forecast fluctuations in product demand and how buyer needs will most likely
change.
75) Driving-forces analysis typically does not include
1. A)
determining whether forces are acting to cause fundamental changes in industry
conditions and/or the industry’s competitiveness.
2. B)
determining whether forces are acting to cause industry rivals to shift to a
different strategic group.
3. C)
determining whether forces are acting to strengthen or weaken market demand.
4. D)
determining whether forces are acting to make competition more or less intense.
5. E)
determining whether forces are acting to raise or lower industry profitability.
76) The real payoff of driving forces is to help managers
understand
1. A)
what strategy changes are needed to prepare for the impacts of the driving
forces.
2. B)
the overall strength of the five competitive forces.
3. C)
whether the industry’s strategic group map will be static or dynamic.
4. D)
what conditions exist in the economy at large.
5. E)
the extent to which rivals have more than two competitively valuable
competencies or capabilities.
77) Driving-forces analysis has
1. A)
speculative value because it compels the firm to drive strategic intent and
collective choice into operating practices.
2. B)
theoretical value because it allows managers to visualize the many different
dimensions of the preferred forces that allow for industry functionality.
3. C)
practical value and is basic to the task of thinking strategically about where
the industry is headed and how to prepare for the changes ahead.
4. D) no
real analytical value because the driving forces are already established in the
marketplace and it is too late to make astute and timely strategy adjustments.
5. E)
perceived value and is associated with identifying the close and distant rivals
within an operating industry.
78) Which of the following driving forces would have the least impact on the
attractiveness of the automobile industry?
1. A)
changes in the long-term industry growth rate
2. B)
entry or exit of major firms
3. C)
shifts in who buys the product and how the product is used
4. D)
changes in costs and efficiency
5. E)
regulatory influences and government policy changes
79) What is the best technique for revealing the different
market or competitive position that rival firms occupy in the industry?
1. A)
strategic group mapping
2. B)
PESTEL analysis
3. C)
five forces framework
4. D)
the Value Net framework
5. E)
competitor analysis
80) A strategic group
1. A)
consists of those industry members that are growing at about the same rate and
have similar product line breadth.
2. B)
includes all rival firms having comparable profitability.
3. C) is
a cluster of industry members with similar competitive approaches and market
positions in the market.
4. D)
consists of those firms whose market shares are about the same size.
5. E) is
made up of those firms having comparable profit margins.
81) Not all positions on a strategic group map are equally
attractive because
1. A)
small strategic groups are always less profitable than large strategic groups.
2. B)
entry and exit barriers are different for each strategic group.
3. C)
across-group rivalry is always weakest at the outer edge of the strategic group
map.
4. D)
industry-driving forces and competitive pressures favor some groups and
disadvantage others.
5. E)
key success factors are substantially different for differently positioned
industry participants.
82) When all sellers pursue essentially identical strategies and
have similar market positions
1. A)
they remain subject to different driving forces.
2. B)
they place about the same emphasis on various distribution channels.
3. C)
they use the same key success factors to differentiate their products.
4. D)
the industry can be said to contain one strategic group.
5. E)
they still must possess customer service attributes that differentiate them
from one another in the marketplace.
83) Strategic group mapping is a visual technique for displaying
1. A)
how many rivals are pursuing each type of strategy.
2. B)
which companies have the biggest market share and who the industry leader
really is.
3. C)
the different market or competitive positions that rival firms occupy in an
industry and for identifying each rival’s closest competitors.
4. D)
which companies have the highest degrees of brand loyalty.
5. E)
which companies have failing business models.
84) Which of the following pairs of variables are least likely to be
useful in drawing a strategic group map?
1. A) geographic
market scope and degree of vertical integration
2. B)
brand name reputation and distribution channel emphasis
3. C)
product quality and product-line breadth
4. D)
level of profitability and size of market share
5. E)
price/perceived quality and image range and the extent of buyer appeal
85) The concept of strategic groups is relevant to industry and
competitive analysis because
1. A)
firms in the same strategic groups are rarely close competitors—a firm’s
closest competitors are usually in distant strategic groups.
2. B)
strategic group maps help identify how each competing firm is positioned and
the relationship to its closest competitors.
3. C)
competition grows in intensity as the number and diversity of the strategic
groups in an industry increases.
4. D)
the profit potential of firms in the same strategic group is usually very
similar.
5. E)
competitive pressures tend to be weaker within strategic groups than across
strategic groups.
86) When drawing a strategic group map
1. A)
one strategic variable and one financial variable should be used as axes for
the map.
2. B) it
is important for the variables used as axes to be highly correlated.
3. C)
the best variables to use as axes for the map are those that identify the
competitive characteristics that delineate strategic approaches used in the
industry.
4. D) it
is important to use price as the variable for the vertical axis.
5. E)
the primary objective is to determine which strategic groups are profitable and
which are not.
87) Which of the following is not an appropriate guideline for
developing a strategic group map for a given industry?
1. A)
The variables chosen as axes for the map should indicate important differences
among rival approaches.
2. B)
The variables chosen as axes for the map do not have to be either quantitative
or continuous. They can be discrete variables.
3. C)
The variables chosen as axes for the map should be highly correlated.
4. D)
Several maps should be drawn if more than one pair of variables give different
exposures to the competitive positioning relationships present in the industry
structure.
5. E)
The sizes of the circles on the map should be drawn proportional to the
combined sales of the firms in each strategic group.
88) With the aid of a strategic group map for the pizza segment
of the food service industry, one can
1. A)
identify easily the entry and exit barriers for each strategic group and
intersegment competition with other casual restaurants.
2. B)
pinpoint precisely which pizza restaurants are in profitable strategic groups
and which are not.
3. C)
identify which competitive forces are strong and which are weak for pizza
restaurants.
4. D)
measure accurately whether across-group rivalry among pizza establishments is
stronger than within-group rivalry, and vice versa.
5. E)
reveal which pizza establishments are close competitors and which are distant
rivals, and that not all positions on the map are equally attractive.
Comments
Post a Comment