Quiz
Chapter 2 - Evaluating a Firm's External Environment
Questions in this quiz (49)
1The ________ consists of broad trends in the context in which a firm operates that can have an impact on a firm's strategic choices.
- Amicro-environment
- Bgeneral environment
- Ctask environment
- Dinternal environment
2All of the following are elements of the general environment except
- Atechnological trends.
- Bdemographic trends.
- Cindustrial trends.
- Dcultural trends.
3________ is/are the distribution of individuals in a society in terms of age, sex, marital status, income, ethnicity, and other personal attributes that may determine buying patterns.
- ADemographics
- BEconomics
- CTechnological trends
- DCulture
4The values, beliefs and norms that guide behavior in a society are known as
- Aclimate.
- Bdemographics.
- Ceconomics
- Dculture.
5When activity in an economy is relatively low for a short period of time, the economy is said to be in a
- Arecession.
- Bdepression
- Cprosperous cycle.
- Dboom
6Civil wars, political coups, terrorism, wars between countries, famines, and country or regional economic recessions are all examples of which element of the general environment?
- Ademographics
- Bspecific international events
- Ceconomics
- Dculture
7In the S-C-P model, ________ refers to the strategies that firms in an industry implement
- Astructure
- Bstrategy
- Cconduct
- Dperformance
8In a perfectly competitive industry
- Athere are relatively few firms operating in the industry
- Bthe products and services sold by firms in the industry are very different from each other
- Cit is very costly for firms to enter the industry
- Dit is not very costly for firms to enter or exit the industry
9Within the five forces framework, the five most common threats facing firms from their competitive environment include each of the following except
- Asubstitutes
- Bcomplementors
- Csuppliers.
- Dbuyers
10Firms in industries characterized by ________ can expect to earn only competitive parity
- Aperfect competition
- Bmonopolistic competition
- Coligopoly
- Dmonopoly
11Which type of competition is characterized by a large number of firms, heterogeneous products and low cost of entry and exit?
- Aperfect competition
- Bmonopolistic competition
- Coligopoly
- Dmonopoly
12Which type of competition is characterized by a small number of firms, homogeneous products and costly entry and exit?
- Aperfect competition
- Bmonopolistic competition
- Coligopoly
- Dmonopoly
13A(n) ________ is any individual, group, or organization outside a firm that seeks to reduce the level of that firm's performance
- Aenvironmental threat
- Benvironmental opportunity
- Cenvironmental equalizer
- Dcompetitive advantage
14Firms that have either recently begun operations in an industry or that threaten to begin operations in an industry soon are considered to be ________ in the five forces framework
- Abarriers to entry
- Bnew competitors
- Csuppliers
- Dbuyers
15________ exist when a firm's costs rise as a function of its volume of production
- AEconomies of scale
- BEconomies of scope
- CDiseconomies of scale
- DLearning curve effects
16All other things being equal, which of the following would lead to lower barriers to entry in an industry
- AThe existence of economies of scale in the industry
- BProducts are highly differentiated in the industry
- CIndustry incumbents have learning-curve cost advantages
- DRaw materials are widely and readily available at a competitive price
17Frequent price cutting by firms in an industry, frequent introduction of new products by firms in an industry and intense advertising campaigns are indications of
- Ahigh power of buyers.
- Bhigh threat of new entrants
- Chigh levels of direct competition
- Dhigh threat of substitutes.
18The threat of direct competition tends to be high when
- Athere are few firms in an industry and these firms tend to be unequal in size
- Bthe industry growth rate is higher
- Cfirms are unable to differentiate their products.
- Dproduction capacity can be added in small increments
19The products or services provided by a firm's direct competitors meet ________ customer needs in ________ ways as the product provided by the firm itself.
- Adifferent; the same
- Bapproximately the same; the same
- Cdifferent; different
- Dapproximately the same; different
20Which of the following statements regarding substitutes is accurate
- AIn the extreme, substitutes can ultimately replace an industry's products or services
- BSubstitutes place a floor on the prices firms in an industry can charge and on the profits firms in an industry can earn.
- CSubstitutes rarely impact the profitability that firms in an industry can earn
- DThe importance of substitutes in reducing the profit potential in a wide variety of industries is decreasing
21 ________ make a wide variety of raw materials, labor and other critical assets available to firms
- Abuyers
- BRivals
- CSuppliers
- DSubstitutes
22Which of the following attributes makes suppliers a stronger threat?
- AThe supplier's industry is dominated by a small number of firms
- BThe product or service provided by suppliers is not highly differentiated
- CSuppliers are threatened by substitutes.
- DSuppliers are not able to engage in forward vertical integration
23Which of the following is the best example of forward vertical integration
- Aa car dealership opening up its own automobile manufacturing plant
- Ba car company opening its own dealerships to sell its products directly to customers
- Ca car company opening its own chain of video rental stores
- Da car company opening a plant to product motorcycles
24Buyers tend to have less power when
- Aa firm has only one buyer, or a small number of buyers
- Bthe products or services being sold to buyers are standard and not differentiated
- Cthe supplies they purchase are an insignificant portion of the costs of their final products
- Dthey are not earning significant economic profits
25Overall, the average level of performance in an industry is likely to be highest when
- Athe threat level of all five forces is high
- Bthe threat level of rivalry and substitutes is low, but the threat level of suppliers, buyers and new entrants is high.
- Cthe threat level of rivalry, substitutes and new entrants is high, but the threat level of buyers and supplies is low
- Dthe threat level of all five forces is low.
26If your customers value your products more when they have your product and another firm's product rather than when they have your product alone, the other firm is considered to be a
- Acompetitor
- Bcomplementor.
- Crival.
- Dsubstitute.
27 An industry in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies is known as a(n) ________ industry
- Afragmented
- Bconsolidated
- Cmature
- Demerging
28The major opportunity facing firms in fragmented industries is
- Arefining their current products and emphasizing an increase in service quality
- Bdeveloping new products and technologies
- Ccreating a first-mover advantage through technological leadership
- Dthe implementation of strategies that began to consolidate the industry into a smaller number of firms.
29The advantages that come to firms that make important strategic and technological decisions early in the development of an industry are known as ________ advantages
- Afirst-mover
- Bcompetitive
- Ccomparative
- Demerging
30In general, first-mover advantages can arise from any of these sources except
- Atechnological leadership
- Bpreemption of strategically valuable assets.
- Cthe creation of customer switching costs
- Dusing an imitative strategy to introduce improved versions of competitors' new products
31 Mature industries are characterized by
- Aan increase in total industry demand
- Bfaster increases in production capacity
- Ca slowdown in the introduction of new products or services.
- Da decrease in the amount of international competition.
32The most promising opportunity for a firm in a declining industry is to
- Aestablish itself as a first mover in the post-shakeout industry
- Bbecome a market leader in the pre-shakeout industry
- Cbecome a fast follower in the pre-shakeout industry
- Dmerge with another firm.
33Firms in a declining industry that engage in a long, systematic phased withdrawal from the industry, extracting as much value as possible during the withdrawal period, are following a(n) ________ strategy
- Aniche
- Bexpansion
- Cdivestment
- Dharvest
34Industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies are called ________ industries
- Afragmented
- Bmature
- Cemerging
- Ddeclining
35________ are advantages that come to firms that make important strategic and technological decisions early in the development of an industry
- AVisionary advantages
- BFirst-mover advantages
- CComparative advantages
- DMissionary advantages
36A consolidation strategy is a good option in what type of industry
- Amature
- Bemerging
- Cfragmented
- Ddeclining
37________ are resources required to successfully compete in an industry.
- AStrategically valuable assets
- BTechnological leader strategies
- CProcess innovations
- DProduct innovations
38________ costs exist when customers make investments in order to use a firm's particular products or services
- AFirst-mover-switching
- BTechnological leadership-switching
- CCustomer-switching
- DProcess-switching
39Based on the above description, the hardwood furniture industry can best be described as a(n) ________ industry.
- Aemerging
- Bfragmented
- Cconsolidated
- Ddeclining
40The level of direct competition in the hardwood furniture industry can best be described
- Alow because of the numerous firms in the industry and the slowing growth rate
- Blow because of the slowing growth rate and the competition from composite wood furniture
- Chigh because of the numerous firms in the industry and the slowing growth rate
- Dmoderate because the slowing growth rate offsets the numerous firms in the industry
41The threat of suppliers in the hardwood furniture can best be described as
- Alow because there are a large number of suppliers selling an undifferentiated product.
- Bhigh because there are a large number of suppliers selling an undifferentiated product
- Cmoderate because the large number of suppliers is offset by the undifferentiated products they are selling
- Dmoderate because of the slowing growth rate in the industry and the commodity nature of the products produced by suppliers
42If Hickory Divine were to open its own chain of furniture stores, this would be an example of
- Acomplementors.
- Bbackward vertical integration
- Cconsolidation.
- Dforward vertical integration
43In this example, composite wood furniture would be an example of a(n)
- Asubstitute
- Brival.
- Cnew entrant
- Dcomplementor.
44The threat of buyers in this industry is best described as
- Ahigh because there are many suppliers, none of which represents a significant portion of the hardwood furniture industry's sales.
- Blow because of the slow industry growth and the commodity nature of the suppliers.
- Clow because there are many suppliers, none of which represents a significant portion of the hardwood furniture industry's sales
- Dhigh because of the slow industry growth and the commodity nature of the suppliers
45Which of the following best describes the competition in the U.S. online auction industry
- Aperfect competition
- Bmonopolistic competition
- Coligopoly
- Dmonopoly
46For BidBuy, services such as those offered by DollarDog that make BidBuy's services more valuable for customers who use the services of both companies are best described as
- Acomplementors.
- Bsubstitutes
- Crivals
- Dsuppliers
47Factors such as BidBuy's feedback rating system that are valuable to the company's customers but which are not useful on other online auction sites are examples of
- Afirst-mover advantages.
- Bcomplementors.
- Csubstitutes
- Dcustomer-switching costs
48BidBuy has a ________ advantage
- Avisionary
- Bglobal
- Cfirst-mover
- Dcomparative
49The products or services provided by a firm's substitutes meet ________ customer needs in ________ ways as the product provided by the firm itself.
- Adifferent; the same
- Bapproximately the same; the same
- Cdifferent; different
- Dapproximately the same; different
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- Quiz on Chapter 2 - Evaluating a Firm's External Environment, created by Strategy IO on 28/12/2016.
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- Strategy IO
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- Created on 28 Dec 2016 · updated on 8 Jan 2017
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