Exam 3: Evaluating a Companys External Environment

A) lacks powerful driving forces.
B) gives each industry competitor the best potential for building sustainable competitive advantage over rival firms.
C) makes it challenging for industry members to compete successfully unless they can strongly differentiate their products.
D) is conducive to industry members earning attractive profits.
E) requires that industry members have low costs in order to be competitively successful.

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A) a rival's current strategy,objectives,capabilities,and assumptions about itself and the industry.
B) a rival's market share,customer segmentation,business model,and product proposition.
C) a rival's appetite as an acquisition candidate.
D) a rival's geographic market,product offerings,and strategic grouping.
E) All of these.

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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 rival sellers experience strong bargaining power from both suppliers and influential customers.
E) less rival sellers experience weak bargaining power from both suppliers and influential customers.

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A) points to those things that every firm in the industry needs to attend to in order to develop product propositions.
B) hints at the firm's ability to generate above-average profitability.
C) reveals the firms capabilities and resources are aligned with operating practices of industry participants.
D) raises a company's chances of crafting a sound strategy.
E) raises a company's sustainability dimensions and market characteristics in line with industry dynamics.

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A) firms in the same strategic groups are rarely close competitors-a firm's closest competitors are usually in distant strategic groups.
B) strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors.
C) competition grows in intensity as the number and diversity of the strategic groups in an industry increases.
D) the profit potential of firms in the same strategic group is usually very similar.
E) competitive pressures tend to be weaker within strategic groups than across strategic groups.

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A) sellers in an industry provide similar products and generally their cost structures are different because of competitive advantages in their operation.
B) some sellers may be less sensitive than others to price,quality,or service differences.
C) along the various stages of the value chain sellers are conducive to earning attractive profits.
D) the industry is a highly cohesive structure with limited fragmentation and few industry members.
E) All of these.

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A) there are relatively few industry key success factors and rivals have highly differentiated products.
B) the industry's driving forces are strong and rivals have strongly differentiated products.
C) barriers to entry are moderately high and the pool of likely entry candidates is small.
D) rivals are active in making fresh moves to lower prices,introduce new products,increase promotional efforts and advertising,and otherwise gain sales and market share.
E) barriers to entry are high and buyer switching costs are high.

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A) marketing tactics including special sales promotions such as introducing new or improved features or 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) reduce distribution capabilities and market presence.

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A) good substitutes for supplier products/services exists.
B) the cost of switching from one supplier to another is high.
C) suppliers furnish a critical part or component.
D) buying firms are looking for suppliers with good just-in-time supply capabilities.
E) a few large suppliers are the primary sources of a particular item.

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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.

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A) virtually all buyers have strong brand attachments and are highly brand loyal.
B) demand for the product is growing rapidly.
C) sales are made to buyer groups with either strong bargaining power or high sensitivity.
D) sellers are racing to add the latest and greatest performance features so as to attract the patronage of important or prestigious buyers.
E) buyers are very quality conscious.

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A) determines the strength of the industry's driving forces.
B) determines the extent of the competitive pressure on industry profitability.
C) means that fewer companies can achieve a competitive advantage via anything other than being the industry's low-cost leader.
D) means there will be a larger number of competitive advantage opportunities for industry members.
E) means there will be a greater number of industry key success factors.

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A) the collective impact of the driving forces will act to increase/decrease market demand,increase/decrease competition,and raise/lower industry profitability in the years ahead.
B) it will become more or less important to aim the company's strategy at being the industry's low-cost producer.
C) the driving forces will have a bigger impact on company profitability than competitive forces.
D) the industry is likely to become more or less vertically integrated and why.
E) competitive advantages are likely to grow or diminish in importance.

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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.

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A) When buyer demand is growing rapidly
B) When buyers are relatively well-informed about sellers' products,prices,and costs
C) When buyers pose a credible threat to integrate backward into the product market of sellers
D) When sellers' products are weakly differentiated,making it easy for buyers to switch to competing brands
E) When buyers have considerable discretion over whether and when they purchase the product

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