BUS 401- Chapter 2 – MC

Two of the key inputs to developing forecasts discussed in the text are
environmental scanning and competitor intelligence
________ tracks the evolution of environmental trends, sequences of events, or streams of activities
Environmental monitoring
Scanning the general environment would identify information on
the aging population and ethnic shifts
Gathering “competitive intelligence”
is good business practice.
Environmental forecasting involves developing plausible projections about the ______ of environmental change
all of the above
A danger of forecasting discussed in the text is that
managers may view uncertainty as “black and white” while ignoring important “gray areas.”
The aging of the population, changes in ethnic composition, and effects of the baby boom are
demographic changes
Increasingly larger numbers of women entering the work force since the early 1970s is an example of
sociocultural changes
Emerging sociocultural changes in the environment include
the increasing educational attainment of women in the past decade
All of the following are important elements of the political/legal segment of the general environment except
the increased use of Internet technology
Which of the following would be considered part of a firm’s general environment
Higher unemployment rates
Interest rate increases have a ______ impact on the residential home construction industry and a _____ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items
negative; neglible
To illustrate interrelationships among different segments of the general environment: The persistence of large U.S. trade deficits (_____) has led to greater demand for protectionist measures, such as trade barriers and quotas (______). These measures lead to higher prices for U.S. consumers and fuel inflation (_____).
macroeconomic, political/legal, macroeconomic
Which is considered a force in the “Five Forces model”?
Rivalry among competing firms
Which of the following firms would likely pose the least competitive threat?
A competitor to your product where a high switching cost exists.
The threat of new entrants is high where there are
low economies of scale
Product differentiation by incumbents act as an entry barrier because
new entrants will have to spend heavily to overcome existing customer loyalties
Which of the following would be an entry barrier?
large economies of scale
A large fabricator of building components purchased a steel company to provide raw materials for its production process. This is an example of
backward integration
The bargaining power of the buyer is greater than that of the supplier when
the buyer’s profit margin is low
Buyer power will be greater when
it is concentrated or purchases large volumes relative to seller sales
The bargaining power of suppliers increases as
threat of forward integration by suppliers increases
An independent group of suppliers, such as farmers, gather to form a cooperative to sell their products to buyers directly, replacing their former distributors. This is an example of
forward integration
The bargaining power of suppliers is enhanced under the following market condition
dominance by a few suppliers
In Porter’s Five Forces model, conditions under which a supplier group can be powerful include all of the following except
readily available substitute products
A supplier group would be most powerful when there is/are
few substitute products
Threat of substitute products comes from
firms in other industries that produce products or services that satisfy the same customer need
Firms would be most likely to face intense rivalry with competitors when they
have high fixed costs, in a slow growth industry with high exit barriers
The most intensive rivalry results from
numerous equally balanced competitors, slow industry growth, high fixed or storage costs
Exit barriers arise from
all of the above
Because the internet lowers barriers to entry in most industries, it
increases the threat of new entrants
End users are
all of the above
Incumbent firms may enjoy increased bargaining power because the Internet
diminishes the power of many distribution channel intermediaries
Supplier power has increased because of the Internet for all of the following reasons except
Some suppliers have created Web-based purchasing systems that encourage switching
In general, the threat of substitutes is heightened because the internet
introduces new ways to accomplish the same task
How do infomediaries and consumer information websites increase the intensity of competitive rivalry?
by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over
The value net is a game-theoretic approach that
is a way to analyze all the players in a game and analyze how their interactions affect a firm’s ability to generate and appropriate value
In the value-net analysis, complementors are
firms that produce products or services that have a positive impact on the value of a firm’s products or services
Strategic groups consists of
A group of firms within an industry that follow similar strategies
Which of the following statements about strategic groups is false?
Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups