Q&A Hero

Q: (p. 130) Which of these represent the second level in the evolution of a global corporation? A. Foreign licensing B. Direct investment C. Export-import D. Bartering

Q: (p. 130) Firms at what strategy level are called multinational corporations (MNCs)? A. First B. Second C. Third D. Fourth

Q: (p. 130) The evolution of a global corporation often entails progressively involved strategy levels. What level has the minimal effect on existing product lines? A. Foreign licensing B. Export-import C. Technology transfer D. Direct investment

Q: (p. 128) The direct foreign investment of foreign-based globals that operate in the United States now exceeds A. 200 billion B. 20 billion C. 90 billion D. 9 billion

Q: (p. 128) In recent times, as companies go global, standardization is steadily being replaced by _____. A. globalization B. customization C. democratization D. vulcanization

Q: (p. 128) Firms from which country lead the way in "direct foreign investment" in the United States? A. Japan B. India C. China D. United Kingdom

Q: (p. 128) The 100 largest U.S. global earn an average of ___ percent of their operating profits abroad. A. 12 B. 69 C. 54 D. 37

Q: (p. 128) The change in customer _______ behavior was the beginning of an evolution in international strategy. A. saving B. living C. purchase D. moving

Q: (p. 128) ______ is the development of modified products and services, and the use of somewhat tailor-made messages, to meet the demands of a local population A. Globalization B. Horizontal integration C. Customization D. Standardization

Q: (p. 128) ______ is the use of a common product, service, and message across all markets to create a strong brand image. A. Globalization B. Horizontal integration C. Standardization D. Customization

Q: (p. 128) ______ refers to the strategy of pursuing opportunities anywhere in the world that enable a firm to optimize its business functions in the countries in which it operates. A. Vertical integration B. Horizontal integration C. Globalization D. Franchising

Q: Identify and briefly explain the five factors in the operating environment.

Q: How do power curves help assess industry structure?

Q: What are the problems in defining industry boundaries?

Q: What is an industry? Why is it important to define industry boundaries?

Q: How does jockeying for position escalate intensity of rivalry among competitors?

Q: How do substitutes affect industry structure?

Q: Identify and explain the factors/characteristics that make the buyer group powerful.

Q: What characteristics make a supplier group powerful? Explain.

Q: Identify and briefly describe the major sources of barriers to entry.

Q: Explain the five force model of industry analysis as described by Porter. Give an example of each force.

Q: Define eco-efficiency. Identify the four key characteristics of eco-efficient corporations.

Q: Discuss the three profound social changes in the recent years that affect the performance of a firm.

Q: Describe the three tiers of environmental factors that affect the performance of a firm.

Q: (p. 119) Four factors are mentioned which affect a firm's access to needed personnel. One of these factors is: A. Geographic location B. Employee benefits C. National employment rates D. Availability of skills

Q: (p. 118) Purchasing behavior is often better predicted by: A. Geographics B. Demographics C. Psychographics D. Reputation

Q: (p. 117) This term refers to descriptive characteristics that can be used to differentiate groups of present or potential customers. A. Geographics B. Demographics C. Buyer behaviors D. Psychographics

Q: (p. 118) While developing the customer profile, it is important to include: A. Psychographic information B. Market share C. Experience D. Management image

Q: (p. 117) A result of analyzing the operating environment is developing a ____ with respect to geographic, demographic, psychographic and buyer-behavior factors. A. Market share analysis B. Customer profile C. Competitive edge D. Consumer/surveys

Q: (p. 116) Included in a competitor profile is: A. Psychographic B. Supplier relations C. Experience D. Demographic

Q: (p. 116) A firm can more accurately forecast both its long-term and short-term growth and profit potential by developing its: A. Competitor profile B. Financial position C. Technological innovation D. Vendor profile

Q: (p. 116) In considering the competition's profile, a firm would NOT be concerned with which of the following? A. Market share and breadth of product line B. Facility location and production capacity C. Financial position and caliber of personnel D. Salary of the chief executive and board of directors

Q: (p. 116) The operating environment: A. Also called the remote environment B. Also called the social environment C. Affects the firm's success in resource acquisition D. Does not include competitive position

Q: (p. 116) The environment that is typically subject to much influence by the firm is: A. External B. Ecological C. Remote D. Operating

Q: (p. 110) The starting point for industry definition is A. The firm's mission statement B. A focus group session with the firm's top managers C. The federal government's definition of the industry D. A definition of the industry in global terms

Q: (p. 109) Defining industry boundaries is a very difficult task because A. Industry evolution creates industries within industries B. Industries are becoming very narrow in scope C. Industries do not evolve over time D. Industries remain static over time

Q: (p. 109) Designing viable strategies for a firm requires a thorough understanding of the firm's: A. Earnings B. Growth rate C. Market share D. Competition

Q: (p. 109) Which of the following is NOT a reason why defining an industry's boundaries is important? A. It helps executives determine the arena in which their firm is competing B. It focuses attention on the firm's competitors C. It helps executives determine key factors for success D. Stakeholders demand it

Q: (p. 109) The definition of an industry's boundaries is important because A. It has to be included in the mission statement B. It helps executives determine the arena in which their firm is competing C. It has to be reported to stockholders D. It helps set the prices for the firm's products

Q: (p. 109) Designing viable strategies for a firm requires a thorough understanding of the firm's industry and competition. Which one of the following is NOT a question the firm's executives need to address? A. Who are our customers? B. What are the boundaries of the industry? C. What is the structure of the industry? D. Which firms are our competitors?

Q: (p. 107) Which one of the following is NOT a tactic used by competitors when they jockey for position? A. Price competition B. Reduced advertising C. Advertising price-cuts D. Product introduction

Q: (p. 108) In intense rivalry, rivals are: A. Similar in strategies B. Diverse in origins C. Similar in personality D. Few

Q: (p. 107) In intense competition, competitors are characteristically: A. Few B. Of unequal power C. Equal in size D. Not foreign

Q: (p. 107) What type of industry growth intensifies competitive rivalry? A. Fast growth B. Moderate growth C. Slow growth D. Sporadic growth

Q: (p. 107) Which one of the following is a tactic typically used by firms to jockey for position? A. Economies of scale B. Advertising price-cutting C. Access to distribution D. Product withdrawal

Q: (p. 107) High fixed costs is a factor in which of the five forces? A. Threat of entry B. Substitute products C. Jockeying for position D. Powerful suppliers

Q: (p. 107) In intense rivalry among manufacturing firms, fixed costs are: A. High B. Low C. Medium D. Less critical than variable costs

Q: (p. 108) As an industry matures, its: A. Growth rate is unchanged B. Profits are higher C. Growth rate changes D. New firms enter

Q: (p. 107) Rivalry among existing competitors takes the familiar form of: A. Substitute products B. Jockeying for position C. Positioning the company D. Influencing the balance

Q: (p. 107) Exit barriers represent a determinant of A. Entry B. Rivalry C. Buyer power D. Supplier power

Q: (p. 107) In intense competitive rivalry, barriers to exit are: A. High B. Low C. Medium D. Changing

Q: (p. 107) Substitute products that deserve the most attention strategically are those that are: A. Subject to trends B. Produced by industries earning low profits C. Most expensive to produce D. Slow coming into play

Q: (p. 107) Which of the following are considered competitors? A. Low substitutability products B. Firms with dissimilar scope C. Substitute products D. Uncommitted firms

Q: (p. 107) If price ceilings exist, substitute products are limited, unless: A. The quality of the product can be reduced B. The quality of the product can be upgraded C. The quantities of the product available can be increased D. The product cannot be differentiated

Q: (p. 106) Customers have the power to: A. Raise prices B. Demand higher quality C. Lower service quality D. Coordinate competitors

Q: (p. 106) A buyer group is powerful if: A. The buyers pose a credible threat to make the industry's product B. The industry product saves the buyer money C. It earns high profit D. The industry has high exit barriers

Q: (p. 106) Highly profitable buyers are usually: A. Less price sensitive B. More price sensitive C. Very quantity oriented D. Not very quantity oriented

Q: (p. 106) A buyer group is powerful if: A. It earns low profits B. The industry's product is important to the quality of the buyer's products or services C. The industry's product saves the buyer money D. It is not concentrated

Q: (p. 105) A supplier group is powerful if: A. Its product is undifferentiated B. Its product is unique C. Its market is unique D. It must contend with other products

Q: (p. 105) A supplier group is powerful if: A. It is not concentrated B. It is not obligated to contend with other products for sale to the industry C. Raw materials are the major input cost D. Its product is not unique

Q: (p. 105) The power of each supplier depends on: A. Low concentration B. Its commodity-like product C. Relative importance of purchases D. Its inability to integrate forward

Q: (p. 105) Suppliers can exert bargaining power on participants in an industry by: A. Stabilizing their cost bas B. Lowering prices C. Raising prices D. Increasing the quality of services

Q: (p. 103) Entrenched companies may have cost advantages not available to potential rivals. This is an example of: A. Capital requirements B. Cost disadvantage independent of size C. Economies of scale D. Government policy

Q: (p. 103) The learning curve effect is an example of which barrier to entry? A. Cost disadvantages independent of size B. Product differentiation C. Economies of scale D. Government policy

Q: (p. 103) Cost disadvantages independent of size is a factor relevant to A. Threat of new entrants B. Powerful suppliers C. Jockeying for position D. Powerful buyers

Q: (p. 102) The need to invest large financial resources in order to compete creates A. Increased supplier power B. Increased buyer power C. Increased jockeying for position D. A barrier to entry

Q: (p. 104) Which of the following can limit or even foreclose entry to industries with such controls as license requirements? A. Equal opportunity employer B. Federal trade commission C. Government policy D. Securities and exchange commission

Q: (p. 103) Assets purchased at preinflation prices is an example of: A. Product differentiation B. Cost disadvantages independent of size C. Capital requirements D. Distribution

Q: (p. 102-105) Which of the following is NOT a major barrier to entry? A. Economies of scale B. Product differentiation C. Market breadth D. Cost disadvantages independent of size

Q: (p. 102) Which is perhaps the most important entry barrier in the soft drink, over-the-counter drugs, cosmetics, investment banking and public account industries? A. Capital requirements B. Market differentiation C. Economies of scale D. Product differentiation

Q: (p. 102) Which of the following factors is NOT commonly seen as fostering brand identification? A. Being first in the industry B. Product differences C. Customer service D. Customer credit

Q: (p. 102) Barriers to entry: A. Can be cyclical B. Can involve the legal constraints leveling the playing field C. Can include customer loyalty D. Are not important to small firms

Q: (p. 102) Which of the following is a factor that does NOT foster brand identification? A. Advertising B. Customer service C. Product differences D. Price

Q: (p. 102) Economies of scale in an industry refers to: A. Savings that companies within the industry achieve due to increased volume B. Declining average short run costs per unit C. Improved contractual agreements with suppliers in the near term D. Decreased barriers to entry to new firms attempting to enter the industry

Q: (p. 102) New entrants to an industry bring: A. New capacity B. New customers C. Few resources D. Bigger margins

Q: (p. 101) Access to distribution channels is a major source of which competitive force? A. Bargaining power of buyers B. Threat of entry C. Threat of substitute products D. Bargaining power of suppliers

Q: (p. 100) In the economists' "perfectly competitive" industry jockeying for position is unbridled and entry to the industry is A. Very easy B. Prohibited by regulations C. Moderated due to national security concerns D. Very hard

Q: (p. 101) Differentiation of inputs represents a determinant of A. Entry B. Rivalry C. Buyer power D. Supplier power

Q: (p. 101) Brand identity is a determinant of which of these forces driving industry competition? A. Entry B. Rivalry C. Buyer power D. Supplier power

Q: (p. 101) Which of these is a determinant of entry, according to Porter? A. Presence of substitute input B. Ability to backward integrate C. Exit barriers D. Economies of scale