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Which of the following factors should a company consider when determining if an industry offers good
prospects for attractive profits?
Question options:

The industry's growth potential, whether competition

appears destined to become stronger or weaker, how the
1) industry's driving forces might affect overall industry
profitability, the company's competitive position relative to
rivals, and the company's proficiency in performing industry
key success factors
An assessment of which firms in the industry have the best
and worst competitive strategies, whether the number of
2)
strategic groups in the industry is increasing or decreasing,
and whether economies of scale and experience curve
effects are a key success factor
3) Whether there are more than five key success factors and
more than five barriers to entry
4)

Constructing a strategic group map and assessing the

attractiveness of the competitive position of each strategic
group

Whether the market leaders enjoy competitive advantages

5) and how hard it is to develop a strongly differentiated
product
Question
2

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Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry
members depends in part on
Question options:

1) whether most buyers possess roughly equal or varying

degrees of bargaining power.

2) how many buyers are engaged in collaborative partnerships

with sellers.
3)

whether entry barriers are high or low.

4) whether the overall quality of the items being furnished by

industry members is rising or falling.
5) whether buyer demand is strong or declining.
Question
3

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The "driving forces" in an industry

Question options:

1) are usually triggered by changing technology or stronger

learning/experience curve effects.
2)

usually are spawned by growing demand for the product, the

outbreak of price-cutting, and big reductions in entry
barriers.

are major underlying causes of change in industry and

3) competitive conditions and have the biggest influences in
reshaping the industry landscape and altering competitive
conditions.
4) appear when an industry begins to mature but are seldom
present during early stages of the industry life cycle.
are usually triggered by shifting buyer needs and
5) expectations or by the appearance of new substitute
products.
Question
4
The state of competition in an industry is a function of
Question options:

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1) the competitive pressures associated with rivalry among

competing sellers to attract customers.
2)

competitive pressures coming from the attempts of

companies in other industries attempting to win buyers over
to their substitute products.

3) competitive pressures associated with the threat of new

entrants into the marketplace.
4) competitive pressures associated with the bargaining power
of suppliers and customers.
5)

All of these

Question
5

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point

In which one of the following instances is supplier bargaining power and leverage not weakened?
Question options:

1) When industry members pose a credible threat of backward

integration into the business of suppliers
2) When the cost of switching from one supplier to another is
low
3) When the buying firms purchase in large quantities and thus
are important customers of the suppliers
4)

When the item being supplied is a commodity

5) When the items purchased from suppliers are in short supply

Question
6
Driving forces analysis
Question options:

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point

involves identifying the driving forces, assessing whether

1) their impact will make the industry more or less attractive,
and determining what strategy changes a company may
need to make to prepare for the impact of the driving forces.
2)

identifies which strategic group is the most powerful.

3) helps managers identify which industry member is likely to

become (or remain) the industry leader and why.
4) helps managers identify which key success factors are most
likely to help their company gain a competitive advantage.
5)

helps managers identify which of the five competitive forces

will be the strongest driver of industry change.

Question
7

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point

Not all positions on a strategic group map are equally attractive because
Question options:

1)

entry and exit barriers are different for each strategic group.

2) key success factors are usually quite different for differently

positioned industry participants.
3) small strategic groups are always less profitable than large
strategic groups.
4) across-group rivalry is strongest at the outer edges of the
strategic group map.
industry driving forces and competitive pressures favor
some companies or groups and hurt others and the profit
5)
potential of different strategic groups varies because of
strengths and weaknesses in each strategic group's position.
Question

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point

The most powerful of the five competitive forces is usually

Question options:

1) the competitive pressures that stem from the ready

availability of attractively priced substitute products.
2) the competitive pressures associated with rivalry among
competing sellers in the industry for buyer patronage.
3)

the benefits that emerge from close collaboration with

suppliers and the competitive pressures that such
collaboration creates.

4) the competitive pressures associated with the potential

entry of new competitors.
5)

the bargaining power and leverage that large customers are

able to exercise.

Question
9

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point

A company's broad "macro-environment" refers to

Question options:

1) the industry and competitive arena in which the company

operates.
2) general economic conditions plus the factors driving
change in the markets being served.
all the strategically significant forces and factors outside a
company's boundaries - general economic conditions,
3)
population demographics, societal values and lifestyles,
technological factors, and governmental legislation and
regulation.
4) the competitive market environment that exists between a
company and its competitors.

5) the dominant economic features of a company's industry.

Question
10

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point

Which one of the following is not part of a company's broad macro-environment?

Question options:

1)
2)
3)
4)

5)
Question
11

conditions in the economy at large.

population demographics and societal values and lifestyles.
technological and ecological factors.
governmental regulations and legislation.
the company's resource strengths, resource weaknesses,
and competitive capabilities.
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point

Which one of the following is not a factor that affects the strength of supplier bargaining power?
Question options:

1)

Whether needed inputs are in short or ample supply

2) Whether industry members are a strong threat to integrate

backward into the business of suppliers
3) Whether industry members are struggling to make good
profits because of slow-growing market demand
4)

Whether the costs of industry members to switch their

purchases to alternative suppliers or substitutes are high
or low

5)
Whether the item being supplied is a commodity that is
readily available from many suppliers

Question
12

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point

An industry's key success factors

Question options:

1)

are a function of market share, entry barriers, economies

of scale, degree of vertical integration, and industry
profitability.

2) vary according to whether an industry has high or low

long-term attractiveness.
can be determined through identifying an industry's
dominant economic characteristics, assessing the five
3) competitive forces, considering the impacts of the driving
forces, comparing the market positions of industry
members, and forecasting the likely next moves of industry
rivals.
can be determined from studying the "winning" strategies
4) of the industry leaders and ruling out as potential key
success factors the strategy elements of those firms
considered to have "losing" strategies.
depend on the relative competitive strengths of the
industry leaders and how vulnerable they are to
5)
competitive attack.

Question
13

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point

The bargaining leverage of suppliers is greater when

Question options:

1)
2)

only a small number of suppliers exist and when it is

difficult for industry members to switch to attractive
substitutes.

industry members incur low costs in switching their

purchases from one supplier to another.
3) industry members purchase in large quantities and thus
are important customers of the suppliers.
4) it makes good economic sense for industry members to
vertically integrate backward.
5)

the supplier industry is composed of a large number of

relatively small suppliers.

Question
14

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point

The rivalry among competing firms tends to be more intense when

Question options:

demand for the product is growing slowly, one or maybe

several industry members become dissatisfied with their
1) market position, buyers have low switching costs, and
when strong companies outside the industry acquire weak
firms in the industry and launch aggressive moves to build
market share.
2) the products/services of rival sellers are strongly
differentiated and buyer demand is strong.
3)

4)

5)
Question
15

rivals are relatively content with their market position.

there are so many industry rivals that the impact of any
one company's actions is spread thinly across all industry
members.
there are fewer firms in the industry that have unequal
market shares.
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point

As a rule, the stronger the collective impact of competitive pressures associated with the five competitive
forces,

Question options:

1)
2)

3)

the stronger are the industry's driving forces.

the lower the combined profitability of industry members.
the fewer companies that can achieve a competitive
advantage via anything other than being the industry's
low-cost leader.

4) the larger the number of competitive advantage

opportunities for industry members.
5) the greater the number of industry key success factors.
Question
16

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point

Which of the following is not generally a "driving force" capable of producing fundamental changes in
industry and competitive conditions?
Question options:

1)
2)
3)
4)

5)

Changes in the long-term industry growth rate

Increasing globalization of the industry
Product innovation and technological change
Ups and downs in the economy and in interest rates
New government regulations or significant changes in
government policy toward the industry

Question
17

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point

Which of the following are most unlikely to qualify as driving forces?

Question options:

1)
Changes in the long-term industry growth rate, the entry

or exit of major firms, and changes in cost and efficiency

2) Increasing globalization of the industry and product
innovation
3)

New Internet technology applications, new government

regulations, and significant changes in government policy
toward the industry

4) Mounting competition from substitutes and increasing

efforts to collaborate with suppliers via strategic alliances
5)
Question
18

Changes in who buys the industry's product and how they

use it
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point

Which of the following is not an appropriate guideline for developing a strategic group map for a given
industry?
Question options:

1)

2)

The variables chosen as axes for the map should indicate

big differences in how rivals have positioned themselves to
compete in the marketplace.
The variables chosen as axes for the map can be
quantitative, qualitative, or discrete and defined in terms of
distinct classes and combinations.

3) The variables chosen as axes for the map should be highly

correlated.
4)

Several maps should be drawn if more than one pair of

variables can help illuminate differences in the competitive
positioning of industry members.

5)
The sizes of the circles on the map should be drawn
proportional to the combined sales of the firms in each
strategic group.

Question
19

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point

Which one of the following is not a reason industry members are often motivated to enter into collaborative
partnerships with key suppliers?
Question options:

1)
2)

To reduce the costs of switching suppliers

To speed the availability of next-generation components

3) To enhance the quality of parts and components being

supplied and reduce defect rates
4) To squeeze out important cost savings for both themselves
and their suppliers
5)

To reduce inventory and logistics costs

Question
20

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point

In which of the following instances are industry members not subject to stronger competitive pressures from
substitute products?
Question options:

1) The costs to buyers of switching over to the substitutes are

low
2)

Buyers are dubious about using substitutes

3) The quality and performance of the substitutes is well

matched to what buyers need to meet their requirements
4)

Buyer brand loyalty is weak

5) Substitutes are readily available at competitive prices

Question
21

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point

Which one of the following increases the competitive pressures associated with the threat of entry?
Question options:

1) When incumbent firms are likely to launch competitive

initiatives to strongly contest the entry of newcomers
2) When buyers have a high degree of loyalty to the brands
and product offerings of existing industry members
3) When buyer demand for the product is growing fairly
slowly
4) When few outsiders have the expertise and resources to
hurdle whatever entry barriers exist
5) When newcomers can expect to earn attractive profits
Question
22

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point

In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as:
Question options:

1) Which rivals badly need to increase their unit sales and

market share?
2) Are there predictable trends in the timing of rivals' newproduct launches or marketing promotions?
3) Which rivals have a strong incentive, along with the
resources, to make major strategic changes?
4) Which rivals are likely to enter new geographic markets or
expand their product offerings?
5)
Question
23

All of these
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point

Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in
industry and competitive conditions?
Question options:

1)

Changes in who buys the product and how they use it,
changes in the long-term industry growth rate, and
changes in cost and efficiency

2) Entry or exit of major firms, product innovation, and

marketing innovation
3)

Increases in the economic power and bargaining leverage

of customers and suppliers, growing supplier-seller
collaboration, and growing buyer-seller collaboration

4) Diffusion of technical know-how and changing societal

concerns, attitudes, and lifestyles
Changes in manufacturing processes brought on by
5) technological change, increasing globalization of the
industry, and new Internet capabilities
Question
24

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point

Which of the following conditions acts to weaken buyer bargaining power?

Question options:

1) When buyers are unlikely to integrate backward into the

business of sellers
2) When buyers are well informed about sellers' products,
prices, and costs
3)

When the costs incurred by buyers in switching to

competing brands or to substitute products are relatively
low

4) When buyers have the ability to postpone purchases if they

don't like the prices offered by sellers

5)

When buyers are few in number and/or often purchase in

large quantities

Question
25

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point

Having good competitive intelligence about rivals' strategies, latest actions and announcements, resource
strengths and weaknesses, and moves to improve their situation is important because
Question options:

1) it identifies who the industry's current market share

leaders are.
2) it helps a company to anticipate what moves rivals are
likely to make next and to craft its own strategic moves.
3) good scouting reports help identify which rival is in which
strategic group.
4)

it enables company managers to determine which rival has

the worst strategy and how to avoid making the same
strategy mistakes.

it enables more accurate predictions about how long it will

5) take a particular rival to copy most of what the strategy
leader is doing.
Question
26

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point

Which of the following is not a factor to consider in identifying an industry's dominant economic features?
Question options:

1)
2)
3)
4)

The market size, growth rate and prospects

The scope of competitive rivalry including geographic area
The market demand-supply conditions
How strong driving forces and competitive forces are

5)

The role and pace of technological change

Question
27

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point

Which of the following is not a factor that causes buyer bargaining power to be stronger?
Question options:

1) Some buyers are a threat to integrate backward into the

business of sellers
2)

The industry is composed of a few large sellers and the

customer group consists of numerous buyers that purchase
in fairly small quantities

3) Buyers have considerable discretion over whether and

when they purchase the product
4) Buyers are well informed about sellers' products, prices,
and costs
5)

The costs incurred by buyers in switching to competing

brands or to substitute products are relatively low

Question
28

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point

A strategic group consists of those firms in an industry that

Question options:

1)

are subject to the same driving forces.

2) are placing about the same emphasis on each distribution

channel.
3) use the same key success factors to differentiate their
products.
4) employ similar competitive approaches and occupy similar
positions in the market.

5)

have similar size market shares.

Question
29

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point

Rivalry among competing sellers is generally more intense when

Question options:

1)

buyer demand is growing rapidly.

2) the industry's driving forces are strong and rivals have

strongly differentiated products.
3) barriers to entry are moderately high and the pool of likely
entry candidates is small.
4) industry conditions tempt competitors to use price cuts or
other competitive weapons to boost unit volume.
5)

barriers to entry are high and buyer switching costs are

high.

Question
30

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point

An industry's driving forces

Question options:

1) are generally determined by competitive pressures, the sizes of

strategic groups, and the power of rival firms' competitive strategies.
2)

generally act in ways that will strengthen or weaken market

demand, make competition more or less intense, and lead to higher
or lower industry profitability.

3) frequently cause a leveling off of industry growth and a reduction in

the bargaining power of buyers.
4)
are normally triggered by ups and downs in the economy, higher or
lower inflation rates, higher or lower interest rates, or important new

strategic alliances.
can be triggered by such factors as growing competitive pressures
from substitute products, greater seller-supplier collaboration, and
5)
the efforts of rival firms to employ new or different offensive
strategies.

Overall Grade (