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Management
Q:
The idea behind self-managing teams is to give middle management more control over lower-level hiring and firing decisions.
Q:
The main goal for a company's human resource function is to find ways to lower wage and benefits costs.
Q:
A small reduction in materials and transportation costs can have a substantial impact on profitability.
Q:
Strong brand loyalty reduces customer defection rates.
Q:
There is a positive relationship between the length of time that a customer stays with a company and profit per customer.
Q:
Competition can be viewed as a process driven by innovations.
Q:
Process innovation is the development of a new process for producing products and delivering them to customers.
Q:
The R&D function of the value chain can help to lower costs or raise the value of a product and permit a company to charge higher prices.
Q:
The primary value chain activities create value for the customer, while the support activities play no part in creating value.
Q:
In the value chain, research and development (R&D) is concerned with the design of products and production processes.
Q:
At Adam's bicycle shop, the primary value chain activity of production occurs each time a customer's bicycle is repaired.
Q:
Primary activities of the value chain relate to the design creation, and delivery of the product, its marketing, and its support and after-sale service.
Q:
In the value chain, support activities are those involved in the physical creation of the product, its marketing and delivery to buyers, and its after-sales service.
Q:
A value chain is a sequence of activities for transforming inputs into outputs that are valued by customers.
Q:
The attributes of many physical products include the form, features, performance, durability, reliability, style, and design of the product.
Q:
Brad has developed a new, improved planting procedure for use in his apple orchard. Brad is creating a process innovation.
Q:
Employee productivity is usually measured by output per employee and capital productivity by output per unit of invested capital.
Q:
Consider the macroenvironment facing a large, international airline headquartered in the United States (such as American or United Airlines). Give at least three examples of important trends or events from each of the five segments of the airline's macroenvironment (macroeconomic, technological, demographic, social, and political/legal), and tell whether each of them represents a threat or an opportunity for the firm.
Q:
Describe one major limitation of each of the following models for competitive analysis: the five forces model, the strategic groups model, and the industry life cycle model. Does the existence of these limitations mean that the models are not useful? Why or why not?
Q:
Using the industry life cycle model, tell how the threats and opportunities for existing firms in an industry change over time.
Q:
What is meant by the term "strategic group," and why is it important for managers to understand this in order to position their companies in a competitive marketplace?
Q:
List and briefly discuss each of the elements of Michael Porter's Five Forces Model.
Q:
Due to a recent relaxation in pollution standards, Ford Motors is withdrawing its electric-powered cars from sales in the U.S. market. Ford is responding to a change in which of the following macroenvironmental forces?
a) Economic
b) Demographic
c) Strategic
d) Social
e) Political and legal
Q:
All of the following are demographic forces in the macroenvironment except
a) age
b) values
c) gender
d) social class
e) sexual orientation
Q:
The Internet is an example of a
a) technological force.
b) social force.
c) political and legal force.
d) demographic force.
e) global force.
Q:
High levels of immigration into the U.S. in recent years have had an impact on which of the following macroenvironmental factors?
a) Economic
b) Social
c) Political and legal
d) Demographic
e) All of the macroenvironmental factors have been affected.
Q:
Beverage makers are finding that water sales are increasing due to consumers' preferences for healthy drinks. Which part of the macroenvironment does this represent?
a) Economic forces
b) Social forces
c) Embryonic forces
d) Political forces
e) Demographic forces
Q:
Julian is asked to examine the demographic environment facing his employer, a clothing manufacturer. Which of the following should Julian examine?
a) Government regulations
b) Inflation
c) Manufacturing technology
d) Aging of the population
e) Society's growing interest in exercise
Q:
All of the following are forces in the wider macroenvironment except
a) economic forces
b) global forces
c) demand forces
d) demographic forces
e) social forces
Q:
Which of the following is not one of the factors in the economic forces of the macroenvironment?
a) Growth rate of the economy
b) Interest rates
c) Price inflation
d) Currency exchange rates
e) Market saturation
Q:
High exit barriers pose the greatest threat to companies in the _________ stage of the industry life cycle.
a) embryonic
b) growth
c) maturity
d) fragmented
e) decline
Q:
The threat from new entrants is greatest in the _________ stage of the industry life cycle.
a) embryonic
b) growth
c) shakeout
d) maturity
e) decline
Q:
Demand reaches total saturation in the ___________ stage of the industry life cycle.
a) embryonic
b) growth
c) shakeout
d) maturity
e) decline
Q:
All of the following are part of the shakeout stage of the industry life cycle except
a) demand is limited to replacement demand.
b) demand approaches saturation levels.
c) rivalry between companies becomes intense.
d) capacity continues to grow.
e) companies cut prices.
Q:
Growth industries
a) typically suffer from high mobility barriers.
b) provide economies of scale to existing companies
c) have high rivalry among established companies.
d) increase prices because customers are more aware of the industry's product.
e) tend to be characterized by weak rivalry.
Q:
Entry barriers in the embryonic stage are frequently based on
a) brand loyalty.
b) technological know-how
c) absolute cost advantages.
d) economies of scope.
e) economies of scale
Q:
In growth industries,
a) replacement demand is increasing rapidly.
b) technological expertise is the most important entry barrier.
c) rivalry is high.
d) distribution channels are poorly developed.
e) buyers are familiar with the industry's product.
Q:
Walmart, Kmart, Target, Costco and Fred Meyer are examples of
a) companies in a proprietary group.
b) companies with the same rate of return.
c) companies which move between strategic groups.
d) a group of companies characterized as discounters within a strategic group.
e) companies which share competitive forces.
Q:
Merck, Eli Lilly, and Pfizer are examples of?
a) a generic drug strategic group.
b) companies which manufacture low-cost drugs.
c) companies with low R&D spending
d) a proprietary strategic group pursuing a high-risk, high-return strategy.
e) unsuccessful patent monopolies.
Q:
Mobility barriers
a) prevent movement within a strategic group.
b) inhibit the movement of companies between strategic groups in an industry.
c) inhibit the movement of a company from one industry to another.
d) include exit barriers of the strategic group that a company wants to enter.
e) are low when exit barriers in the strategic group that a company is a member of are high.
Q:
The concept of strategic groups suggests that
a) a company's major competitors are those in other groups.
b) companies within a strategic group all have the same rate of return.
c) it is easier for a company to move between groups than within a group.
d) different strategic groups can have different standings with respect to each of Porter's five competitive forces.
e) each company in the group pursues a unique basic strategy.
Q:
Members of a strategic group
a) compete directly with members of other strategic groups.
b) are affected by Porter's five competitive forces to the same degree that members of other strategic groups are affected.
c) follow a business model that is similar to that pursued by other companies in the group.
d) earn the same rate of return.
e) move easily to other groups as desired.
Q:
The bargaining power of an industry's buyers is greater when
a) the industry is consolidated and the buyers are many.
b) the buyers make small and infrequent purchases.
c) they can threaten to enter the industry and produce the product themselves.
d) buyers' switching costs are high.
e) it is not feasible for buyers to purchase inputs from more than one company in the industry.
Q:
The bargaining power of an industry's suppliers is greater when
a) the supply industry is fragmented.
b) switching costs are high.
c) the industry buys in large quantities.
d) many substitutes are available.
e) firms in the industry can threaten backward vertical integration.
Q:
Research suggests that it is often the __________ firms in an industry that initiate price cuts or increase promotions in an attempt to cover fixed costs.
a) strongest
b) weakest
c) largest
d) oldest
e) newest
Q:
The extent of rivalry among established companies is lowest when
a) the industry's product is a commodity.
b) demand is growing rapidly.
c) exit barriers are substantial.
d) the industry is entering a decline stage.
e) the industry is dominated by a small number of large companies.
Q:
Which of the following is not a determinant of the extent of rivalry among established companies?
a) The number and size distribution of companies in the industry
b) The power of buyers
c) The cost structure of firms in an industry
d) Exit barriers
e) Demand conditions
Q:
Which of the following industry structures is dominated by a small number of large companies?
a) Fragmented industry
b) Consolidated industry
c) Mature industry
d) Monopoly
e) Growing industry
Q:
Which of the following industry structures consists of a large number of small and medium-sized companies, none of which is in a position to determine industry price?
a) Fragmented industry
b) Consolidated industry
c) Oligopoly
d) Monopoly
e) Sector
Q:
As a barrier to new entry, absolute cost advantages can be based on
a) continuous advertising of brand and company names.
b) high product quality, service-oriented innovations, and good after-sales service.
c) cost reductions that arise from the mass production of standardized output.
d) the unique ability of established companies to spread fixed costs over a large volume.
e) control over low-cost inputs required for production, be they labor, materials, equipment, or management skills.
Q:
If economies of scale are an industry's primary entry barrier, a new entrant's major risk is
a) its inability to access labor and materials.
b) inferior quality of its products.
c) its inability to match the innovation of the established firm.
d) its inability to produce in sufficient volume to match the cost advantages of established producers.
e) its inability to get buyers to switch to its product.
Q:
Which of the following is not a barrier to entry?
a) Economies of scale
b) Brand loyalty
c) Absolute cost advantages
d) High customer bargaining power
e) High customer switching costs
Q:
Which of the following is not one of Porter's five forces?
a) Risk of entry by potential competitors
b) Bargaining power of suppliers
c) Ability to earn greater profits
d) Bargaining power of buyers
e) The closeness of substitutes to an industry's products.
Q:
It is possible for a company to alter the strength of one or more of the five competitive forces in the industry
a) by deferring action indefinitely.
b) by adopting a strong and compelling vision.
c) through proper CEO succession planning.
d) through its choice of strategy.
e) None of these
Q:
Within Porter's framework, a _________ competitive force can be regarded as a(n) __________.
a) strong; threat
b) weak; threat
c) strong; opportunity
d) weak; competitive advantage
e) strong; competitive advantage
Q:
A company's closest competitors are those that
a) are in the same geographical area.
b) serve the same basic customer needs.
c) are small and aggressive.
d) focus on low price.
e) attack and then retreat before the company can respond.
Q:
A group of companies offering products or services that are close substitutes for each other is referred to as a(n)
a) strategic group.
b) market segment.
c) sector.
d) supplier.
e) industry.
Q:
In mature industries, companies tend to recognize their interdependence and try to avoid price wars.
Q:
As an industry enters the shakeout stage, rivalry between companies becomes intense.
Q:
Growth in an embryonic industry is slow because of buyers' unfamiliarity with the industry's product, high prices due to the inability of companies to reap any significant scale of economies, and poorly developed distribution channels.
Q:
As an industry enters maturity, barriers to entry decrease, and the threat of entry from potential competitors increases.
Q:
Explosive growth cannot be maintained indefinitely. Sooner or later, the rate of growth slows, and the industry enters the mature stage.
Q:
Normally, the importance of control over technological knowledge as a barrier to entry has diminished by the time an industry enters its growth stage.
Q:
The growth industry is where demand is expanding as second-time consumers enter the market.
Q:
In a declining industry, competition usually decreases.
Q:
The stability of a mature industry is threatened by price wars.
Q:
Rivalry in embryonic industries is based not so much on price as on educating customers, opening up distribution channels, and perfecting the design of the product.
Q:
Managers must anticipate how the strength of industry competitive forces will change as the industry evolves and then formulate appropriate strategies to take advantage of opportunities.
Q:
The industry life cycle model identifies four sequential stages in the evolution of an industry that lead to four distinct kinds of industry environment.
Q:
One of the defining characteristics of the mature stage of the industry life cycle is that growth is low or zero.
Q:
As an industry enters the shakeout stage of the industry life cycle, the rivalry between companies decreases.
Q:
An important determinant of the strength of the competitive forces in an industry is the changes that take place in it over time.
Q:
Mobility barriers are factors that help the movement of companies between strategic groups.
Q:
Within an industry, each strategic group may face a different set of opportunities and threats.
Q:
Strategic groups are groups of companies in which each company follows a strategy that is similar to that pursued by other companies in the group, and is the same strategy followed by companies in other groups.
Q:
The systematic analysis of forces in the industry environment using the Porter framework is a powerful tool that helps managers to think strategically.
Q:
Substitute products are the products of different businesses or industries that can satisfy similar customer needs.
Q:
The bargaining power of suppliers is the ability to raise the price of inputs or to raise the costs of the industry in other ways.
Q:
The bargaining power of buyers is the ability to bargain down prices charged by companies in the industry or to raise the costs of companies in the industry by demanding better product quality and service.
Q:
Exit barriers are the economic, strategic, and emotional factors that prevent companies from leaving an industry.