Chapter 3: Organizational environment

INDUSTRY ENVIRONMENT

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Fill the blank about the pressure levels of industrial factors impact on
firms.

Threat of Suppliers

1. If suppliers are few, Suppliers have ……high….. power

2. If there are no substitutes, Suppliers have ……high….. power

3. If the supplier’s prices form a large part of the total costs of the
organization, Suppliers have ……high….. power

Threat of customers

4. If buyers are concentrated, the power of customers will …high…..

5. If the product is undifferentiated, the power of customers will …high…..

6. If the selling price is unimportant to the total cost of the buyer, the power
of customers will …high…..

Threat of Existing Rivalry

7. Number of competitors is high, competitive degree among existing

rivalry is ……high.……

8. Rate of industry growth is high, competitive degree among existing

rivalry is ………high……..

9. Product or service characteristics are different, competitive degree

among existing rivalry is …high………

10. Amount of fixed costs is high, competitive degree among existing rivalry
is ……high……

11. Height of exit barriers is high, competitive degree among existing

rivalry is ………high…….

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 Chapter 3: Organizational environment

12. Diversity of rivals is high, competitive degree among existing rivalry is

………high…….

Threat of Potential entrants

13. If economies of scale are high, threat of potential entrants is …low….

14. If differentiation of products/services is high, threat of potential

entrants is …low….

15. If capital required is high, threat of potential entrants is …low….

16. If switching costs is high, threat of potential entrants is …low….

17. If access to distribution channels is high, threat of potential entrants is

…low….

18. If governments protect a market, threat of potential entrants is …low….

Threat of Substitutes

19. If the possible threat of entry barriers is low, threat of substitutes will …
low..

20. If the ability of the customers to switch to the substitute is high, threat
of substitutes will …high…

21. If the cost of providing some extra aspect of the service that will
prevent switching is high, threat of substitutes will ……low ……

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