BA 4302 Chapter 3

Which of the following is NOT a factor to consider in identifying an industry’s dominant economic features?

How strong driving forces and competitive forces are.

Which of the following is NOT a relevant consideration in identifying an industry’s dominant economic features?

The number and sizes of buyers, the number of rivals, and the pace of product innovation.

Which of the following is NOT one of the five typical sources of competitive pressures?

The power and influence of industry driving forces.

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

Whether buyer demand is strong or declining.

Competitive pressures stemming from buyer bargaining power tend to be weaker when

The costs incurred by buyers in switching to competing brands or substitute products are relatively high.

Which of the following conditions acts to WEAKEN buyer bargaining power?

When buyers are unlikely to integrate backward into the business of sellers.

Which of the following is NOT a factor that causes buyer bargaining power to be stronger?

The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities.

Just how strong the competitive pressures are from substitute products depends on

Whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.

In which of the following instances is supplier bargaining power and leverage NOT weakened?

When the items purchased from suppliers are in short supply.

Which one of the following is NOT a reason industry members are often motivated to enter into collaborative partnerships with key suppliers?

To reduce the costs of switching suppliers.

Which one of the following does NOT intensify the competitive pressures associated with the threat of entry?

When industry members are struggling to earn good profits.

Which one of the following increases the competitive pressures associated with the threat of entry?

When newcomers can expect to earn attractive profits.

In which one of the following instances is supplier bargaining power and leverage NOT weakened?

When the items purchased from suppliers are in short supply.

Which of the following is generally NOT considered as a barrier to entry?

Rapid market growth.

The best test of whether potential entry is a strong or weak competitive force is

To ask if the industry’s growth and profit prospects are strongly attractive to potential entry candidates.

The most powerful of the five competitive forces is USUALLY

The competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage.

Factors that cause the rivalry among competing sellers to be WEAK include

Rapid growth in buyer demand and high buyer switching costs.

Which one of the following does NOT cause the rivalry among competing sellers to be WEAK?

When one or more competitors become dissatisfied with their market position.

The rivalry among competing sellers tends to be less INTENSE when

Industry rivals are not particularly aggressive in drawing sales and market share away from rivals.

The rivalry among competing firms tends to me MORE INTENSE when

– Demand for the product is growing slowly, one or maybe several industry members become dissatisfied with their market position. – Buyers have low switching costs – When strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to build market share.

A competitive environment where there is a 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.

Is conductive to industry members earning attractive profits.

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.

Is competitively unattractive from the standpoint of earning good profits.

As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces,

The lower the combined profitability of industry members.

The steps involved in driving forces analysis are

– Identifying the driving forces. – Assessing whether their impact will make the industry more or less attractive. – Determining what strategy changes are needed to prepare for the impact of the driving forces.

Which of the following is NOT generally a "driving force" capable of producing fundamental changes in industry and competitive conditions?

Ups and downs in the economy and in interests rates.

Which of the following are most UNLIKELY to qualify as driving forces?

Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances.

Which of the following do NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration.

Which one of the following is NOT a common type of driving force?

Increasing efforts on the part of industry members to collaborate closely with their suppliers.

An industry’s driving forces generally act in ways

That will strengthened or weaken market demand, make competition more or less intense, and lead to higher or lower industry profitability.

A strategic group is

A cluster of industry rivals that have similar competitive approaches and market positions.

A strategic group consists of those firms in an industry that

Employ similar competitive approaches and occupy similar positions in the market.

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?

The variables chosen as axes for the map should be highly correlated.

Not all positions on a strategic group map are equally attractive because

Industry driving forces and competitive pressures favor some companies or groups and hurt others and the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group’s position.

The payoff of good scouting reports on rivals is improved ability to

Predict what strategic moves rivals are likely to make next, thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals’ missteps.

Having good competitive intelligence about rivals’ strategies, latest actions and announcements, resource strengths and weaknesses , and moves to improve their situation is important because

It helps a company to anticipate what moves rivals are likely to make next to craft its own strategic moves.

In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as:

– Which rivals badly need to increase their unit sales and market share? – Are there predictable trends in the timing of rivals’ new-product launches or marketing promotions? – Which rivals have a strong incentive, along with the resources, to make major strategic changes? – Which rivals are likely to enter new geographic markets or expand their product offerings?

What are the key success factors in an industry?

Are the strategy elements, intangible assets, and competitive capabilities that most affect industry members’ abilities to prosper in the marketplace.

An industry’s key success factors can be determined

– Through identifying an industry’s dominant economic characteristics. – Assessing the five competitive forces. – Considering the impacts of the driving forces. – Comparing the market positions of industry members. – Forecasting the likely next moves of industry rivals.

In identifying an industry’s key success factors, strategist should

– Consider on what basis customers choose between competing brands. – What resources and competitive capabilities firms need to be competitively successful. – What shortcomings are almost certain to put a company at a significant competitive disadvantage.

Which of the following is NOT a good example of a marketing-related key success factor?

High utilization of fixed assets.

Which of the following is a good example if a manufacturing-related key success factor?

High labor productivity (especially if the production process has high labor content).

Which of the following factors should a company consider when determining if an industry offers good prospects for attractive profits?

– The industry’s growth potential. – Whether competition appears destined to become stronger or weaker. – How the industry’s driving forces might affect overall industry profitability. – The company’s competitive position relative to rivals. – The company’s proficiency in performing industry key success factors.

Evaluating whether an industry presents a sufficiently attractive business opportunity usually does NOT involve a consideration of which of the following factors?

Whether the industry’s product is strongly or weakly differentiated.