Exam 3: Evaluating a Companys External Environment

A) because of such powerful driving forces as swings in buyer demand,changing interest rates,ups and downs in the economy,and higher/lower entry barriers.
B) because of newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups.
C) because new industry key success factors emerge.
D) because forces create pressures or incentives for industry participants (competitors,customers,suppliers) to alter their actions in important ways.
E) chiefly because of changes in the barriers to entry and the degree of competition from substitute products.

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A) developing a comprehensive list of all the potential causes of changing industry conditions.
B) predicting which new driving forces will emerge next.
C) determining which of the five competitive forces is the biggest driver of industry change.
D) identifying the driving forces,assessing whether their impact will make the industry more or less attractive,and determining what strategy changes are needed to prepare for the impact of the driving forces.
E) All of these.

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A) the number of buyers is small,such that each customer's business tends to be particularly important to a seller.
B) buyer demand is growing slowly or maybe even declining.
C) the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.
D) buyers are well informed about sellers' products,prices,and costs.
E) the buyer group consists of a few large buyers and the seller group consists of numerous small firms.

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a) Driving forces refer to the internal ...

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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 the industry offers an opportunity for a blue ocean strategy.
E) to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

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A) it identifies who the industry's current market share leaders are.
B) it helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves.
C) good scouting reports help identify which rival is in which strategic group.
D) it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes.
E) it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

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A) low buyer switching costs and rival sellers that are relatively equal in size and capability.
B) rapid growth in buyer demand and high buyer switching costs.
C) a recent acquisition of a weak rivals by an industry outsider with the intent of turning the acquisition into a major contender.
D) low barriers to entry and weakly differentiated products among rival sellers.
E) slow growth in buyer demand and strongly differentiated products.

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A) only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.
B) industry members incur low costs in switching their purchases from one supplier to another.
C) industry members purchase in large quantities and thus are important customers of the suppliers.
D) it makes good economic sense for industry members to vertically integrate backward.
E) the supplier industry is composed of a large number of relatively small suppliers.

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A) 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
B) Entry or exit of major firms,product innovation,and marketing innovation
C) Increases in the economic power and bargaining leverage of customers and suppliers,growing supplier-seller collaboration,and growing buyer-seller collaboration
D) Diffusion of technical know-how and changing societal concerns,attitudes,and lifestyles
E) Changes in manufacturing processes brought on by technological change,increasing globalization of the industry,and new Internet capabilities

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A) Rapid market growth
B) Sizable capital requirements and an array of regulatory requirements
C) Strong buyer loyalty to existing brands
D) Sizable economies of scale in production
E) Difficulties in gaining access to distribution and securing adequate space of retailers' shelves

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A) Global distribution capabilities
B) High labor productivity (especially if the production process has high labor content)
C) Low distribution costs
D) Accurate filling of buyer orders
E) Short delivery time capability

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A) conditions in the economy at large.
B) population demographics and societal values and lifestyles.
C) technological and ecological factors.
D) governmental regulations and legislation.
E) the company's resource strengths,resource weaknesses,and competitive capabilities.

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A) When buyers are unlikely to integrate backward into the business of sellers
B) When buyers are well informed about sellers' products,prices,and costs
C) When the costs incurred by buyers in switching to competing brands or to substitute products are relatively low
D) When buyers have the ability to postpone purchases if they don't like the prices offered by sellers
E) When buyers are few in number and/or often purchase in large quantities

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A) Entry or exit of major firms
B) Changing societal concerns,attitudes,and lifestyles
C) Diffusion of technical know-how across more companies and more countries
D) Increasing efforts on the part of industry members to collaborate closely with their suppliers
E) Technological change and manufacturing process innovation

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A) whether the profits of suppliers are relatively high or low.
B) the number of suppliers that each seller/industry member purchases from on average.
C) how aggressively rival industry members are trying to differentiate their products.
D) the extent to which suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry.
E) whether the prices of the items being furnished by the suppliers are rising or falling.

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A) When incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers
B) When industry members are struggling to earn good profits
C) When entry barriers are relatively low
D) When existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence
E) When newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist

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