Crafting & Executing Strategy The Quest For Competitive Advantage Concepts and Cases 21st Edition by Arthur A. Thompson JR - Test Bank

Crafting & Executing Strategy The Quest
for Competitive Advantage Concepts and

Cases 21st Edition By Arthur A.
Thompson Jr -Test Bank
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Chapter 03 Evaluating a Company’s External Environment Answer Key
Multiple Choice Questions
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.
.

B. general economic conditions plus the factors driving change in the markets where a company operates.
C. a company’s “macro-environment.”
D
the competitive market environment that exists between a company and its competitors.
.
E
the dominant economic features of a company’s industry.
.
Six principal components—political factors, economic conditions in the firm’s general

environment (local, country, regional, worldwide), sociocultural forces, technological factors,
environmental factors (concerning the natural environment), and legal/regulatory conditions—
constitute a company’s “macro-environment.”
AACSB: Diversity
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 How to recognize the factors in a company’s broad macro-environment
that may have strategic significance.
Topic: Environmental Scanning

Managers must chart a company’s strategic course by
A
focusing on the local environment in which they are operating.
.
B. ensuring excess production capacity and/or inventory.
C
competing fiercely for a share in the market.
.
2
.
D
building a bigger dealer network.
.
E
developing a thorough understanding of the company’s external and internal environment.
.
In order to chart a company’s strategic course wisely, managers must first develop a deep
understanding of the company’s present situation. Two facets of a company’s situation are
especially pertinent: (1) its external environment—most notably, the competitive conditions of
the industry in which the company operates; and (2) its internal environment—particularly the
company’s resources and organizational capabilities.

AACSB: Diversity
Blooms: Understand
Difficulty: 1 Easy
3 Which of the following is NOT part of a company’s macro-environment?

.
A
legal and regulatory conditions
.
B. European culture, values, and lifestyles
C. the pace of technological change
D
the natural environment
.
E
sociocultural forces
.
Every company operates in a broad “macro-environment” that comprises six principal

components: political factors, economic conditions in the firm’s general environment (local,
country, regional, worldwide), sociocultural forces, technological factors, environmental
factors (concerning the natural environment), and legal/regulatory conditions.
AACSB: Diversity
Blooms: Remember
Difficulty: 1 Easy
Which of the following is NOT one of the principal components of strategic significance in the
PESTEL analysis?
A
political factors including the extent to which government intervenes in the economy
.
4
. economic conditions that include the general economic climate and specific factors such as interest rates,
B. inflation rate, and unemployment rate, as well as conditions in the stock and bond markets that can affect
consumer confidence
C
sociocultural forces including societal values, attitudes, cultural factors, and lifestyles that impact business
.

D technological factors that include the pace of change and technical developments that have the potential fo
. impacting society
E environmental forces that include the competitive structure, the degree of industry fragmentation, and the
. mobility barriers that inhibit business
PESTEL analysis is an acronym that serves as a reminder of the six principal components of
the macro-environment: political, economic, sociocultural, technological, environmental
(concerning the natural environment, not the business environment), and legal/regulatory.
AACSB: Diversity
Blooms: Remember
Difficulty: 1 Easy
Which of the following is LIKELY to have the biggest strategy-shaping impact on on-demand
transportation providers such as Uber and Lyft?
5
A
. Yellow Cab company launches mobile app campaigns for community-connect and awareness.
.

B. Amazon launches a mobile delivery service via drones.
C. Apple launches a global network of driverless cars, buses, and trucks on demand via mobile app.
D
Tesla and ZipCar announce a joint venture for electric automobile sharing services.
.
E
Greyhound develops and markets a mobile app for customers to purchase inter-city bus tickets.
.
The factors in a company’s environment having the biggest strategy-shaping impact typically
pertain to the company’s immediate industry and competitive environment. Apple launching a
global network of driverless transportation vehicles on demand via mobile app will compete
directly with and probably cannibalize most other transportation businesses that remain
reliant on human drivers.
AACSB: Analytical Thinking

Blooms: Apply
Difficulty: 2 Medium
Topic: Porter’s Five Forces

Which of the following factors represents the strategically relevant political factors in the
macro-environment that will influence the performance of all firms across the board?
A
the strength of the federal banking system
.
B. the exogenous forces related to the general environmental demand
C
social factors that could fuel a political agenda and create greater transparency
.
6
.
D
bailouts and energy policies that are industry-specific
.
E
tax policy, fiscal policy, and tariffs providing impetus for anti-trust matters
.
Political factors include political policies, including the extent to which a government
intervenes in the economy. They include such matters as tax policy, fiscal policy, tariffs, the
political climate, and the strength of institutions such as the federal banking system. Some
political policies affect certain types of industries more than others. An example is energy
policy, which affects energy producers and heavy users of energy more than other types of
businesses.

Blooms: Understand
7 Which of the following is NOT a major question to ask in thinking strategically about industry
. and competitive conditions in a given industry?
A
How many companies in the industry have good track records for revenue growth and profitability?
.
B. What strategic moves are rivals likely to make next?
C
What are the industry’s key factors for future competitive success?
.
D
Is the outlook for the industry conducive to providing attractive profitability?
.

E What are the driving forces in the industry, and what impact will these changes have on competitive intensit
. and industry profitability?
Thinking strategically about a company’s industry and competitive environment entails using
some well-validated concepts and analytic tools. These include the five forces framework, the
value net, driving forces, strategic groups, competitor analysis, and key success factors.

Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 03-02 How to use analytic tools to diagnose the competitive conditions in a
company’s industry.
Which of the following does NOT exemplify the impact of the macro-environment on a
company’s strategic opportunities?
A
Sales of Stolichnaya Vodka in the United States dwindle on account of a boycott of Russian products.
.
8
.
B. Consumer confidence in Volkswagen drops precipitously because of falsified emissions data.
C. Netflix squares off with Amazon Prime as its most potent rival in the streaming television and film industry.

D Traffic increases at the outlets of Whole Foods following its introduction of stores comprised solely of gener
. products.
E
Sales of FitBit surge on account of a new feature that monitors users’ blood pressure.
.
The six principal components of the macro-environment are political, economic, sociocultural,
technological, environmental (concerning the natural environment), and legal/regulatory.
Rival firms are part of the immediate industry and competitive environment.
AACSB: Diversity
Blooms: Apply
The most powerful and widely used conceptual tool for diagnosing the principal competitive
pressures in a market is
9
A
. the five forces framework.
.

B. PESTEL.
C
the driving forces model.
.
D
strategic group mapping.
.
E
SWOT analysis.
.
The character and strength of the competitive forces operating in an industry are never the
same from one industry to another. The most powerful and widely used conceptual tool for
diagnosing the principal competitive pressures in a market is the five forces framework.

Blooms: Remember
Difficulty: 1 Easy

The competitive pressures on companies within an industry come from all of the following,
EXCEPT
A those associated with the market maneuvering and jockeying for buyer patronage that goes on among riva
. firms in the industry.
B. those companies in other industries attempting to win buyers over to their substitute products.
C
those associated with the threat of new entrants into the marketplace.
.
1
0.

D
those associated with the bargaining power of suppliers and customers.
.
E
those associated with environmental factors such as water shortages.
.
The five forces framework holds that competitive pressures on companies within an industry
come from five sources. These include (1) competition from rival sellers, (2) competition
from potential new entrants to the industry, (3) competition from producers of substitute
products, (4) supplier bargaining power, and (5) customer bargaining power.

Blooms: Understand
Difficulty: 1 Easy
1 Which of the following is NOT one of the five forces of competitive pressures?
1.
A
the power and influence of social/demographic trends
.
B. the bargaining power of suppliers and seller-supplier collaboration
C
the threat of new entrants into the market
.
D
the attempts of companies in other industries to win customers over to their own substitute products
.
E
the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry
.
The five forces framework holds that competitive pressures on companies within an industry
come from five sources. These include (1) competition from rival sellers, (2) competition
from potential new entrants to the industry, (3) competition from producers of substitute
products, (4) supplier bargaining power, and (5) customer bargaining power.

Blooms: Understand
Difficulty: 1 Easy
The most powerful of the five competitive forces is USUALLY
A
the competitive pressures that stem from the ready availability of attractively priced substitute products.
.
1 B the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that
2. . goes on among rival sellers in the industry.
C the benefits that emerge from close collaboration with suppliers and the competitive pressures that such
. collaboration creates.

D
the competitive pressures associated with the potential entry of new competitors.
.
E
the bargaining power and leverage that large customers are able to exercise.
.
The strongest of the five competitive forces is often the rivalry for buyer patronage among
competing sellers of a product or service.

Blooms: Understand
Difficulty: 1 Easy
Using the five forces model of competition to determine the character and strength of the
competitive forces within a given industry involves
building the picture of competition in three steps: (1) identify the different parties involved, along with
1
A specific factors that bring about competitive pressures; (2) evaluate how strong the pressures stemming fro
3.
. each of the five forces are (strong, moderate or weak); and (3) determining whether the collective impact o
the five competitive forces is conducive to earning attractive profits in the industry.

building the picture of competition in two steps: (1) determining which rival has the biggest competitive
B. advantage and (2) assessing whether the competitive advantages possessed by various industry members
allow most industry members to earn above-average profits.
C evaluating whether competition is being intensified or weakened by the industry’s driving forces and key
. success factors.
D assessing whether the collective impact of all five forces is weak enough to allow industry members to go o
. the offensive or use a defensive strategy to insulate against fierce competitive pressures.
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.
Using the five forces model to determine the nature and strength of competitive pressures in
a given industry involves 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.

Blooms: Understand
What makes the marketplace a competitive battlefield?
A
the race of industry members to build strong defenses against the industry’s driving forces
.
B
the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rival
.
C
the ongoing race among rival sellers to have the highest-quality product
1 .
4.
D the ongoing efforts of industry members to introduce new and improved products/services at a faster rate
. than their rivals
E
the ongoing race among rivals to achieve the fastest rate of growth in revenues and profits
.
The strongest of the five competitive forces is often the rivalry for buyer patronage among
competing sellers of a product or service.

AACSB: Reflective Thinking

Blooms: Apply
Difficulty: 3 Hard
1 Market maneuvering among industry rivals

5.
A
determines whether the industry’s strategic group map will be static or dynamic.
.
centers around collaborative efforts to overcome the bargaining power of powerful suppliers and powerful
B.
buyers.
C
is usually an industry’s strongest driving force.
.
D is usually one of the two or three weakest competitive forces because of the close familiarity that rivals hav
. for one another’s likely next moves.

E is ongoing and dynamic, with moves and countermoves of rivals producing a continually evolving competiti
. landscape that delivers winners and losers.
When rivalry is strong, the battle for market share is generally so vigorous that the profit
margins of most industry members are squeezed to bare-bones levels.

Blooms: Apply
Difficulty: 1 Easy
Rivalry among competing sellers decreases
A
when buyer demand is growing rapidly.
.

1
6.
B. as it becomes less costly for buyers to switch brands.
C
as the products of rival sellers become commoditized.
.

D
when there is excess production relative to demand.
.
E
as the number of competitors increases.
.
Rivalry increases and becomes a stronger force when: buyer demand is growing slowly;
buyer costs to switch brands are low; the products of industry members are commodities or
else weakly differentiated; the firms in the industry have excess production capacity and/or
inventory; the firms in the industry have high fixed costs or high storage costs; competitors
are numerous or are of roughly equal size and competitive strength; rivals have diverse
objectives, strategies, and/or countries of origin; rivals have emotional stakes in the
business or face high exit barriers.

Blooms: Understand
Factors that cause the rivalry among competing sellers to be weaker include
1
7. A
low buyer switching costs.
.

B
low fixed costs or storage costs.
.
C
many industry rivals of roughly equal size and competitive strength.
.
D
weakly differentiated products among rival sellers.
.
E
slow growth in buyer demand.
.
inventory; the firms in the industry have high fixed costs or high storage costs; competitors

Blooms: Understand
1 The rivalry among competing sellers tends to be less intense when

8.
A
industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales.
.
B. buyer demand is weak and many sellers have excess capacity and/or inventory.
industry rivals are not particularly aggressive or active in making fresh moves to improve their market
C.
standing and business performance.
D
rivals have diverse strategies and objectives and are located in different countries.
.
E
rival sellers have weakly differentiated products.
.
When rivalry is weak, most companies in the industry are relatively well satisfied with their
sales growth and market shares and rarely undertake offensives to steal customers away
from one another.


Blooms: Understand
Rivalry among competing sellers is generally less intense when
A
there are relatively more industry key success factors.
.
B. the industry’s driving forces are weak and rivals have mostly commodity products.
1
9.
C
barriers to entry are moderately low and the pool of likely entry candidates is large.
.
rivals are wary of making fresh moves to lower prices, introduce new products, increase promotional effort
D.
and advertising, and otherwise gain sales and market share.

E
buyers have many alternative products or services from which to choose.
.
When rivalry is strong, the battle for market share is generally so vigorous that the profit
margins of most industry members are squeezed to bare-bones levels.

Blooms: Understand
The competitive battles among rival sellers striving for better market positions, higher sales
and market shares, and competitive advantage, suggest the rivalry force
A
is stronger when firms strive to be low-cost producers than when they use differentiation and focus strateg
.
2
0.
B. is often weak when rivals have emotional stakes in business or face high exit barriers.
C is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive
. weapons to boost unit sales.
tends to intensify when strong companies with sizable financial resources, proven competitive capabilities,
D. and respected brand names hurdle entry barriers looking for growth opportunities and launch aggressive,
well-funded moves to transform into strong market contenders.
E is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buye
. have moderate switching costs.
An analysis of the factors affecting the threat of entry can help managers determine whether
the threat of entry into their industry is high or low, in general. But certain kinds of
companies—those with sizable financial resources, proven competitive capabilities, and a
respected brand name—may be able to hurdle an industry’s entry barriers even when they
are high.

Blooms: Understand
2 In analyzing the strength of competition among rival firms, an important consideration is

1.
A the potential for buyers to exercise strong bargaining power.

.
B
the diversity of competitors in terms of long-term direction, objectives, strategies, and countries of origin.
.
C the number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership
. strategies and focus strategies.
D
the extent to which some rivals have more than two competitively valuable competencies or capabilities.
.
E whether the industry is characterized by a strong learning/experience curve and whether the industry is
. composed of many or few strategic groups.
Since macro-economic factors affect different industries in different ways and to different
degrees, it is important for managers to determine which of these represent the most
strategically relevant factors outside the firm’s industry boundaries. By strategically relevant,
we mean important enough to have a bearing on the decisions the company ultimately
makes about its long-term direction, objectives, strategy, and business model.

Blooms: Understand
2 The intensity of rivalry among competing sellers does NOT depend on whether
2.
A the industry has more than two strong driving forces and whether the industry has more than two diverse
. capable strategic groups.
B. competitors are diverse in terms of long-term directions, objectives, strategies, and countries of origin.
C strong companies outside the industry have acquired weak firms in the industry and are launching aggressi
. moves to transform the acquired companies into strong market contenders.
D one or two rivals have particularly powerful and successful strategies to grow the business, attract and reta
. buyers, and develop a sustained competitive advantage.
E industry conditions attract industry members to use price cuts or other competitive weapons to boost total
. sales volume and market share.
Just how serious the threat of entry is in a particular market depends on two classes of
factors: the expected reaction of incumbent firms to new entry and what are known as
barriers to entry. The threat of entry is low when incumbent firms are likely to retaliate
against new entrants with sharp price discounting and other moves designed to make entry
unprofitable and when entry barriers are high.

Blooms: Understand
In which of the following instances is rivalry among competing sellers NOT more intense?
A
when certain competitors are dissatisfied with their market position and make moves to bolster their stand
.
when strong companies outside the industry acquire weak firms in the industry and launch aggressive mov
B.
2 to transform their newly acquired competitors into stronger market contenders
3.
C
when competitors are fairly equal in size and capability
.
D when the products of rivals are weakly differentiated, buyer switching costs are low, and market demand is
. growing slowly
E when there are vast numbers of small rivals so the impact of any one company’s actions is spread thinly acr
. all industry members
inventory; the firms in the industry have high fixed costs or high storage costs competitors

Blooms: Apply
Competing companies deploy whatever means necessary to strengthen market position,

including all of the following EXCEPT
2
A marketing tactics including special sales promotions such as introducing new or improved features or
4.
. increasing the number of styles to provide greater product selection.

B. differentiating their products by offering better performance features than rivals.
C
improving innovation to increase product performance and quality.
.
D
making efforts to expand dealer networks.
.
E
reducing distribution capabilities and market presence.
.
Entry barriers are high under the following conditions: industry incumbents enjoy large cost
advantages over potential entrants; customers have strong brand preferences and high
degrees of loyalty to seller; patents and other forms of intellectual property protection are in
place; there are strong “network effects” in customer demand; capital requirements are high;
there are difficulties in building a network of distributors/dealers or in securing adequate
space on retailers’ shelves; there are restrictive regulatory policies; there are restrictive trade
policies.

Blooms: Understand
Difficulty: 1 Easy

Which of the following is generally NOT considered a barrier to entry?
A
restrictive regulatory policies
.
B. high capital requirements
C
strong brand preferences
.
2
5.
D
many industry patents in place
.
E
weak “network effects” in customer demand
.
policies.


Blooms: Understand
Difficulty: 1 Easy
Topic: Barriers to Entry
2 Potential entrants are more likely to be deterred from actually entering an industry when
6.
A
incumbent firms are willing and able to be aggressive in defending their market positions against entry.
.
B. incumbent firms are complacent.
C
buyers are not particularly price-sensitive and the industry already contains a dozen or more rivals.
.
D the relative cost positions of incumbent firms are about the same, such that no one incumbent has a
. meaningful cost advantage.
E buyer switching costs are moderately low because of strong product differentiation among incumbent firm
.
The threat of new entry increases the competitive pressures in an industry. This is because
incumbent firms typically lower prices and increase defensive actions in an attempt to deter
new entry when the threat of entry is high.

Blooms: Understand
Difficulty: 3 Hard
Competitive pressures associated with the threat of entry are greater in all of the following
situations, EXCEPT when
A incumbent firms are willing to strongly contest the entry of newcomers with moves designed to make entry
. unprofitable.

2
7.
B. a large pool of potential entrants exists, some of which have the capabilities to overcome high entry barrier
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.

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.
E
customers have low brand preferences and low degrees of loyalty to seller.
.
policies.

Blooms: Understand
Difficulty: 1 Easy
The best test of whether potential entry is a strong or weak competitive force is
2
8. A
the strength of buyer loyalty to existing brands.
.

B. whether the industry’s driving forces make it harder or easier for new entrants to be successful.
C
whether the strategies of industry members are well-matched to the industry’s key success factors.
.
D
whether there are any vacant spaces on the industry’s strategic group map.
.
E
to ask if the industry’s growth and profit prospects are strongly attractive to potential entry candidates.
.
As a rule, the strongest competitive forces determine the extent of the competitive pressure
on industry profitability. The threat of entry is low when incumbent firms are likely to retaliate
against new entrants with sharp price discounting and other moves designed to make entry
unprofitable.

Blooms: Understand

The competitive threat that outsiders will enter a market is weaker when
A financially strong industry members send strong signals that they will launch strategic initiatives to combat
. entry of newcomers.
B. the industry’s market growth is rapid.
C the pool of entry candidates is large and some have resources that would make them formidable market
. contenders.
2
9.

D
newcomers can be expected to earn attractive profits.
.
E
buyers have little loyalty to the brands and product offerings of existing industry members.
.
All of these indicate an attractive industry to enter with the exception of signaling by
financially strong incumbents that they will try to deter new entrants.

Blooms: Understand
3 Which of the following is NOT a good example of a substitute product that triggers stronger
0. competitive pressures?
A
a salad as a substitute for French fries
.
B. wireless phones as a substitute for wired telephones
C. Coca-Cola as a substitute for Pepsi
D
snowboards as a substitute for snow skis
.
E
video-on-demand services from a cable TV company as a substitute for going to the movies
.
Competitive pressures are stronger when: Good substitutes are readily available and
attractively priced; buyers view the substitutes as comparable or better in terms of quality,
performance, and other relevant attributes; and the costs that buyers incur in switching to
the substitutes are low. Brands of the same basic product constitute rival products and not
substitutes.

Blooms: Apply
Difficulty: 1 Easy
Topic: Competitive Pressures
The competitive pressures from substitute products tend to be stronger when
A
good substitutes are readily available.
.
3
B. there are fewer number of substitute products.
1.
C
substitutes have lower performance features.
.

D
buyers incur high costs in switching to substitutes.
.
E
substitutes are priced above the market.
.
Competitive pressures are stronger when: (1) Good substitutes are readily available and
attractively priced. (2) Buyers view the substitutes as comparable or better in terms of
quality, performance, and other relevant attributes. (3) The costs that buyers incur in
switching to the substitutes are low.

Blooms: Understand
Difficulty: 1 Easy
In which of the following instances are industry members NOT subject to stronger
competitive pressures from substitute products?
A
3 The costs to buyers of switching over to the substitutes are low.
.
2.
B Buyers are dubious about using substitutes.

.
C The quality and performance of the substitutes are well-matched to what buyers need to meet their
. requirements.
D
Buyer brand loyalty is weak.
.
E
Substitutes are readily available at competitive prices.
.

Blooms: Understand
Difficulty: 1 Easy

Determining how strong the threat of substitutes will be entails
A identifying the relative price/performance relationship of the substitutes, the switching costs, and the over
. buyer demand for the substitute.
B. identifying the attractiveness of other industries.
C
measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling techniques.
.
3
3.
D
adopting a substitute product concentration factor to the buyer volume.
.
E
judging whether industry members are capable of self-manufacturing their products.
.

Blooms: Understand
Difficulty: 1 Easy
3 The lower the user’s switching costs, the

4.
A
harder it is for the sellers of attractive substitutes to lure buyers to their offering.
.
B
more intense the competitive pressures posed by substitute products.
.
C
less intense the competitive pressures posed by substitute products.
.
D
greater the bargaining power from both suppliers and influential customers.
.
E
lesser the bargaining power from both suppliers and influential customers.
.
Good substitutes are readily available and attractively priced. The presence of readily
available and attractively priced substitutes creates competitive pressure by placing a ceiling
on the prices industry members can charge without risking sales erosion. This price ceiling,
at the same time, puts a lid on the profits that industry members can earn unless they find
ways to cut costs.

Blooms: Understand

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Chapter 03 Evaluating a Company’s External Environment Answer Key

Multiple Choice Questions

The strategically relevant factors outside a company’s industry boundaries—economic

Six principal components—political factors, economic conditions in the firm’s general

B. ensuring excess production capacity and/or inventory.

3 Which of the following is NOT part of a company’s macro-environment?

B. European culture, values, and lifestyles

C. the pace of technological change

Every company operates in a broad “macro-environment” that comprises six principal

AACSB: Analytical Thinking

B. the exogenous forces related to the general environmental demand

B. What strategic moves are rivals likely to make next?

AACSB: Analytical Thinking

B. Consumer confidence in Volkswagen drops precipitously because of falsified emissions data.

AACSB: Analytical Thinking

B. the bargaining power of suppliers and seller-supplier collaboration

AACSB: Analytical Thinking

The most powerful of the five competitive forces is USUALLY

AACSB: Analytical Thinking

AACSB: Analytical Thinking

What makes the marketplace a competitive battlefield?

AACSB: Reflective Thinking

1 Market maneuvering among industry rivals

AACSB: Reflective Thinking

Rivalry among competing sellers decreases

AACSB: Analytical Thinking

AACSB: Analytical Thinking

1 The rivalry among competing sellers tends to be less intense when

AACSB: Analytical Thinking

Rivalry among competing sellers is generally less intense when

AACSB: Analytical Thinking

AACSB: Analytical Thinking

2 In analyzing the strength of competition among rival firms, an important consideration is

A the potential for buyers to exercise strong bargaining power.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Reflective Thinking

Competing companies deploy whatever means necessary to strengthen market position,

AACSB: Analytical Thinking

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

B. high capital requirements

AACSB: Analytical Thinking

B. incumbent firms are complacent.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

B. the industry’s market growth is rapid.

AACSB: Analytical Thinking

B. wireless phones as a substitute for wired telephones

C. Coca-Cola as a substitute for Pepsi

AACSB: Analytical Thinking

The competitive pressures from substitute products tend to be stronger when

AACSB: Analytical Thinking

B Buyers are dubious about using substitutes.

AACSB: Analytical Thinking

B. identifying the attractiveness of other industries.

AACSB: Analytical Thinking

3 The lower the user’s switching costs, the

AACSB: Analytical Thinking