Practice Questions for Exam 2 Flashcards
(25 cards)
Retaliation by an industry incumbent against a potential new entrant is far less favored/justified
when: industry growth is _____________ ; oversupply in the industry is _______________; and, fixed costs are ______________
.
A. fast/growing; not present; high
B. fast/growing; present; low
C. slow/declining; present; high
D. fast/growing; not present; low
E. slow/declining; present; low
D. fast/growing; not present; low
The two-part definition of imitation in the VRIO framework is __________and _________.
A. mimicry; organization
B. substitution; rarity
C. duplication; mimicry
D. substitution; organization
E. none of the above
E. none of the above
The number one dimension on which consumers choose to purchase their airline tickets is price.
In other words, consumers of airline services/travel are highly price sensitive. From this, we can
conclude the industry:
A. is highly differentiated
B. is highly commoditized
C. has consumers with very high switching costs
D. A & C are correct answers
E. B & C are correct answers
B. is highly commoditized
. Boeing is one of the world’s largest airplane manufacturers. Boeing’s stock price has significantly suffered in recent years. The company has very significant issues as it relates to its inability to manage quality control in the supply chain. In other words, the firm’s poor oversight and control of key suppliers is causing significant delays in the production of aircraft. Also, Boeing has faced strikes by its machinists (these are very skilled laborers in Boeing’s workforce) due to the management team’s inability to: (1) properly compensate this workforce and (2) prevent a culture that incentivizes workers to speed up production at the expense of safety.
Where would these issues fall on a SWOT analysis?
A. Threats
B. Opportunities
C. Weaknesses
D. Strengths
E. None of the above
C. Weaknesses
Which of the following is a tangible resource?
A. knowledge of customers and industry regulations.
B. a state-of-the-art manufacturing facility
C. trust among co-workers.
D. organizational culture.
E. a firm’s reputation
B. a state-of-the-art manufacturing facility
All the following are factors that increase barriers to entry except:
A. an industry dominated by a few larger companies.
B. an industry where incumbents have taken decades to build distribution channels for products.
C. an industry where products sold are perceived as commodities.
D. an industry requiring significantly large amounts of capital to be spent on PP&E and inventory.
E. none of the above – they all increase barriers to entry.
C. an industry where products sold are perceived as commodities.
Existing companies with disproportionately larger market shares tend have versus
companies with smaller market share and/or new entrants.
A. lower cost of goods sold measured as a percent of revenue because of greater bargaining
power over suppliers
B. the ability to sell their products at a lower price due to their cost structure
C. fixed costs spread out over large revenue and therefore have higher costs as a percent of
revenue
D. A and B
E. A, B, and C
D. A and B
Suppliers are relatively powerful when:
A. they supply commoditized inputs.
B. they can demand higher prices.
C. they can decrease quality of products supplied, yet leave prices charged unchanged.
D. options B and C
E. options A, B, and C
D. options B and C
Which of the following is false about the threat of substitutes in Porter’s 5 forces model?
A. Substitute products are a viable threat when they are more cost efficient than current
industry products.
B. Substitute products are a viable threat when they are of higher quality than current industry
products.
C. Substitute products are a viable threat when they are easier to use than current industry
products.
D. A Coke is a viable substitute for a Pepsi in a P5F discussion.
E. None of the above – they are all true statements about the threat of substitutes as explained
in Porter’s 5 forces model.
D. A Coke is a viable substitute for a Pepsi in a P5F discussion.
- Which of the following is a false statement about the SWOT analysis?
A. Not all strengths have the same impact on performance.
B. A SWOT assessment is a tool used to combine internal assessment and external assessment
for the purpose of creating strategies.
C. A SO strategy is a strategy that capitalizes on an opportunity by utilizing a firm’s strengths.
D. An opportunity’s impact on performance is not dictated by a company’s ability to respond
to the opportunity.
E. A negative issue external to the firm is properly labeled as a threat.
D. An opportunity’s impact on performance is not dictated by a company’s ability to respond
. Intensity of rivalry within an industry increases when?
A. exit barriers are high.
B. companies in the industry have a significantly high amounts of fixed costs.
C. the industry is increasingly characterized as commoditized.
D. the switching costs to the consumers are virtually non-existent.
E. all of the above – they are all true statements about the factors that increase the intensity of rivalry within an industry.
E. all of the above – they are all true statements about the factors that increase the intensity of rivalry within an industry.
All of the following are demographic variables to consider when studying the general/macro environment except:
A. Age
B. Religion
C. Attitudes about green technology
D. Population shifts
E. Ethnicity
C. Attitudes about green technology
The most numerous of the following organizational characteristics are:
A. resources.
B. capacities.
C. capabilities.
D. core competencies.
E. None of the above
A. resources.
Compared to tangible resources, intangible resources are ___________ and __________.
A. less visible; more difficult to copy.
B. less visible; less difficult to copy.
C. more visible; more difficult to copy.
D. more visible; less difficult to copy.
E. less visible; equally as imitable as tangible resources
A. less visible; more difficult to copy.
Dillard’s and Macy’s compete in the department store retailing industry. Ralph Lauren sell shirts to Dillard’s and Macy’s who then , sell these shirts to you in their large department stores. Ralph Lauren creating a website and selling shirts directly to you illustrates what Porter’s Five Forced (P5F) issue?
a. substitution of a supply
b. backward integration by a buyer
c. forward integration by a supplier
d. backward integration by a supplier
e. none of the above- A, B, C and D are all false statements
c. forward integration by a supplier
retaliatory behavior:
a. may be initiated by potential new entrants
b. is carried out by incumbents even if there is no credible threat of a new entrant
c. does come at an expense to the incumbent firm carrying out the retaliation campaign
d. is more justified in high growth industries
e. none of the above- A, B, C and D are all false statements
c. does come at an expense to the incumbent firm carrying out the retaliation campaign
which of the following is true about the firms in an industry?
a. it is proper to also occasionally label these industry firms as suppliers since they supply products to the industry’s buyers
b. high rivalry among industry participants is also known as retaliatory behavior
c. rivalry is also known as competition
d. A & C are correct
e. B & C are correct
d. A & C are correct
Which of the following is NOT considered a supply/ supplier in a Porter’s Five (P5F) analysis?
a. raw materials
b. software packages/ solutions
c. manufacturing equipment
d. human capital (ie labor)
e. none of the above- A, B, C and D are all considered a supply/ supplier in a Porter’s Five Forces (P5F) analysis
e. none of the above- A, B, C and D are all considered a supply/ supplier in a Porter’s Five Forces (P5F) analysis
incumbents competing in a highly ___________ industry are incentivized to engage in retaliation because consumer loyalty is ________
a. commoditized; low/ non-existent
b. commoditized; high
c. differentiated; low/ non-existent
d. differentiated; high
a. commoditized; low/ non-existent
A firm wanting to identify all of the firms in the competitive set will ask and answer which key question?
a. who will take away my revenue?
b. how does my firm generate revenue?
c. who are suppliers?
d. who are my buyers?
e. what are the substitutes to my industry?
a. who will take away my revenue?
A high ratio of buyers to the industry give the ____________ more power. A high ratio of suppliers to the industry gives the ________ more power
a. industry participants; industry participants
b. buyer; industry participant
c. buyer; supplier
d. industry participant; supplier
a. industry participants; industry participants
internal environmental anlaysis
a. is used to uncover intra- industry differences
b. is used to uncover inter-industry differences
c. uncovers a firm’s strengths and weaknesses
d. uncovers opportunities and threats for the firm
e. Α and C are correct statements
e. Α and C are correct statements
Rivalry:
a. leads to price wars
b. is elevated when firms in the indsutry have high fixed costs
c. is elevated when firms have high exit barriers
d. is minimized when the industry is differentiated
e. all of the above- A, B, C and D are all accurate statements
e. all of the above- A, B, C and D are all accurate statements
In recent years hotel workers in NYC have gone on strike protesting any attempts by hotels (industry participants) to replace them with automation. this would result in workers losing their jobs. this example illustrates which porters five forces (P5F) phenomenon?
a. a supply being substituted
b. consolidation of buyers (consol forward in the chain)
c. consolidation of supplier (consol backward in the chain)
d. forward integration by a supplier
e. backward integration by a buyer
a. a supply being substituted
