QUESTION 1

1. The competitive threat that outsiders will enter a market is weaker when
financially strong industry members send strong signals that they will launch strategic
initiatives to combat the entry of newcomers.
the industry's market growth is rapid.
the pool of entry candidates is large and some have resources that would make them
formidable market contenders.
newcomers can be expected to earn attractive profits.
buyers have little loyalty to the brands and product offerings of existing industry members.

QUESTION 2
1. 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.
offers little ability to build a sustainable competitive advantage.
is highly conducive to achieving strong product differentiation and high customer loyalty
to the company's brand.
offers moderate to good prospects for making a reasonable profit and building a
sustainable competitive advantage.
requires that industry members have a strongly differentiated product offering in order
to be profitable.

QUESTION 3
1. Based on an analysis of the five competitive forces, in which of the following industries is
profitability likely to be highest?
apparel
tire manufacturing
electric and gas utilities
commercial airlines
video streaming services
QUESTION 4
1. What makes the marketplace a competitive battlefield?
the race of industry members to build strong defenses against the industry's driving
forces
the constant rivalry of firms to strengthen their standing with buyers and win a
competitive edge over rivals
the ongoing race among rival sellers to have the highest-quality product
the ongoing efforts of industry members to introduce new and improved
products/services at a faster rate than their rivals
the ongoing race among rivals to achieve the fastest rate of growth in revenues and
profits

QUESTION 5
1. Which of the following is not a factor that causes buyer bargaining power to be stronger?
Some buyers are a threat to integrate backward into the business of sellers and become
an important competitor.
Buyers are small and numerous relative to sellers.
Buyers have considerable discretion over whether and when they purchase the product.
Buyers purchase the item frequently and are well-informed about sellers' products,
prices, and costs.
The costs incurred by buyers in switching to competing brands or to substitute products
are relatively low.

QUESTION 6
1. Which of the following is not a good example of a substitute product that triggers stronger
competitive pressures?
a salad as a substitute for French fries
wireless phones as a substitute for wired telephones
Coca-Cola as a substitute for Pepsi
snowboards as a substitute for snow skis
video-on-demand services from a cable TV company as a substitute for going to the
movies
QUESTION 7
1. 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
cohabitors.
competitors.
cooperators.
complementors.
customers.

QUESTION 8
1. Competing companies deploy whatever means necessary to strengthen market position,
including all of the following except
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.
differentiating their products by offering better performance features than rivals.
improving innovation to increase product performance and quality.
making efforts to expand dealer networks.
reducing distribution capabilities and market presence.

QUESTION 9
1. Which of the following is not one of the principal components of strategic significance in the
PESTEL analysis?
political factors including the extent to which government intervenes in the economy
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
sociocultural forces that include societal values, attitudes, cultural factors, and lifestyles
that impact business
technological factors that include the pace of change and technical developments that
have the potential for impacting society
environmental forces that include the competitive structure, the degree of industry
fragmentation, and the mobility barriers that inhibit business
QUESTION 10
1. Which of the following is not an example of a complementor?
microprocessors and laptops
automobiles and gasoline stations
theme parks and hotels
gyms and fitness equipment
newspapers and Internet news providers