Test bank for strategic management theory an integrated approach 9th edition jones

B inhibit the movement of companies between strategic groups in an industry.. D the unique ability of established companies to spread fixed costs over a large volume.. B An industry char

Test Bank for Strategic Management Theory An

Integrated Approach 9th Edition Jones

Mobility barriers

1. A) prevent movement within a strategic group

2 B) inhibit the movement of companies between strategic groups in an industry

3 C) inhibit the movement of a company from one industry to another

4 D) include exit barriers of the strategic group that a company wants to enter

5 E) are low when exit barriers in the strategic group that a company is a member of are high

Demand reaches total saturation in the _ stage of the industry life cycle

1. A) embryonic

2 B) growth

3 C) shakeout

4 D) maturity

5 E) decline

Sales of complementors' products tend to

1. A) increase sales of the industry's product

2 B) decrease sales of the industry's product

3 C) have no effect on sales of the industry's product

4 D) increase sales of substitute products

5 E) decrease sales of substitute products

The competitive force of substitute products tends to be stronger when

1. A) buyers view the prices of substitutes as too high

2 B) the costs that buyers face in switching over to substitutes are low

3 C) the quality and performance of substitutes are relatively low

4 D) substitutes do not embody many characteristics that are similar to those of products already serving the market

5 E) none of these choices

Common exit barriers include

1. A) investments in specific assets

2 B) emotional attachments to an industry

3 C) high fixed costs associated with leaving the industry

4 D) bankruptcy regulations

5 E) all of these choices

Eventually most industries enter a decline stage where

1. A) growth becomes negative

2 B) rivalry among established companies usually decreases

3 C) competitive pressures abate

4 D) excess capacity declines

5 E) demand continues to hold steady

As a barrier to new entry, absolute cost advantages can be based on

1. A) continuous advertising of brand and company names

2 B) high product quality, service-oriented innovations, and good after-sales service

3 C) cost reductions that arise from the mass production of standardized output

4 D) the unique ability of established companies to spread fixed costs over a large volume

5 E) control over low-cost inputs required for production, be they labor, materials, equipment, or management skills

The bargaining power of an industry's suppliers is greater when

1. A) the supply industry is fragmented

2 B) switching costs are high

3 C) the industry buys in large quantities

4 D) many substitutes are available

5 E) firms in the industry can threaten backward vertical integration

What is the impact of shifting industry boundaries on firms within the industry?

1. A) Higher exit barriers

2 B) More competitors

3 C) Reduced threat of substitutes

4 D) Greater bargaining power of suppliers

5 E) Lesser bargaining power of buyers

Economies of scale may arise from

1. A) cost reductions gained through mass production

2 B) discounts on bulk purchases of raw material inputs and component parts

3 C) advantages gained by spreading production costs over a large production volume

4 D) cost savings associated with spreading marketing and advertising costs over a large volume of output

5 E) all of these choices

As an industry enters the shakeout stage,

1. A) rivalry among companies declines

2 B) demand is still growing at a high rate

3 C) prices rise

4 D) excess capacity emerges

5 E) new entrants come into the market

The risk of a price war is greatest in which of the following circumstances?

1. A) A high-growth industry

2 B) An industry characterized by falling demand, high exit barriers, and excess productive capacity

3 C) An industry characterized by a commodity-type product, strong demand, and low exit barriers

4 D) A mature industry during an economic upturn

5 E) An industry characterized by tacit price agreements

Members of a strategic group

1. A) compete directly with members of other strategic groups

2 B) are affected by Porter's five competitive forces to the same degree that

members of other strategic groups are affected

3 C) follow a business model that is similar to that pursued by other companies in the group

4 D) earn the same rate of return

5 E) move easily to other groups as desired

The level of industry demand

1. A) has little effect on competition in the industry

2 B) is one of the determinants of the intensity of rivalry in the industry

3 C) increases as the number of customers grows

4 D) is influenced by bankruptcy regulations

5 E) all of these choices

Suppliers in an industry are most powerful when

1. A) there are few substitutes for the product suppliers sell

2 B) switching costs are low

3 C) companies in the industry can threaten to enter the suppliers' industry

4 D) substitute products are readily available

5 E) all of these choices

Which of the following is not a barrier to entry?

1. A) Economies of scale

2 B) Brand loyalty

3 C) Absolute cost advantages

4 D) High customer bargaining power

5 E) High customer switching costs

An industry's buyers have high bargaining power when

1. A) buyers purchase in large quantities

2 B) switching costs are low

3 C) it is economically feasible for buyers to purchase inputs from several

companies at once

4 D) buyers can threaten to enter an industry and produce the product themselves

5 E) all of these choices

Which of the following is not one of Porter's five forces, as proposed in his original model?

1. A) Threat of complementors

2 B) Bargaining power of suppliers

3 C) Rivalry among established companies

4 D) Threat of new entrants

5 E) Threat of market changes

Which of the following is currently an embryonic industry?

1. A) Personal computers

2 B) Biotechnology

3 C) Internet retailing

4 D) Nanotechnology

5 E) Wireless communications

In growth industries,

1. A) replacement demand is increasing rapidly

2 B) technological expertise is the most important entry barrier

3 C) rivalry is high

4 D) distribution channels are poorly developed

5 E) buyers are familiar with the industry's product

Brand loyalty may be created by

1. A) continuous advertising

2 B) patent protection of products

3 C) product innovation achieved through company research and development

4 D) emphasis on high product quality

5 E) all of these choices

Switching costs may arise when

1. A) changing from one computer system to another

2 B) substitute products are available at a lower unit cost

3 C) when there are a large number of interchangeable products

4 D) products are commodity-like in nature

5 E) all of these choices

Which of the following is not a determinant of the extent of rivalry among established companies?

1. A) The number and size distribution of companies in the industry

2 B) Demand conditions

3 C) The cost structure of firms in an industry

4 D) Exit barriers

5 E) The power of buyers

The industry life cycle model includes which of the following stages?

1. A) Growth

2 B) Shakeout

3 C) Maturity

4 D) Decline

5 E) All of these choices

Growth industries

1. A) typically suffer from high mobility barriers

2 B) tend to be characterized by weak rivalry

3 C) have high rivalry among established companies

4 D) increase prices because customers are more aware of the industry's product

5 E) provide economies of scale to existing companies

Julian is asked to examine the demographic environment facing his employer, a clothing manufacturer Which of the following should Julian examine?

1. A) Government regulations

2 B) Inflation

3 C) Manufacturing technology

4 D) Aging of the population

5 E) Society's growing interest in exercise

When an industry enters the mature stage,

1. A) the market is totally saturated

2 B) demand is limited to replacement demand

3 C) growth is low or zero

4 D) what growth there is in the industry comes from population expansion

5 E) all of these choices

Cosmetics makers focus on the unique needs of customers

of different ages The cosmetics makers recognize the

importance of

1. A) shifting industry boundaries

2 B) the threat of new entrants.

3 C) sectors

4 D) market segments

5 E) substitutes

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?

1. A) Fragmented industry

2 B) Consolidated industry

3 C) Oligopoly

4 D) Monopoly

5 E) Sector

Rivalry refers to

1. A) competition

2 B) the intensity of competition among established companies within an industry

3 C) a struggle among firms using price, product design, and advertising

4 D) all of these choices

5 E) none of these choices

The threat from new entrants is greatest in the _ stage of the industry life cycle

1. A) embryonic

2 B) growth

3 C) shakeout

4 D) maturity

5 E) decline

United Airlines, Amtrak, and Greyhound are all companies in the transportation

1. A) industry

2 B) sector

3 C) game

4 D) segment

5 E) strategic group

Which of the following industry structures is dominated by a small number of large companies?

1. A) Fragmented industry

2 B) Consolidated industry

3 C) Oligopoly

4 D) Monopoly

5 E) Sector

The Internet is an example of a

1. A) technological force

2 B) social force

3 C) political and legal force

4 D) demographic force

5 E) global force

Beverage makers are finding that water sales are increasing due to consumers' preferences for healthy drinks Which part of the macroenvironment does this represent?

1. A) Economic forces

2 B) Demographic forces

3 C) Embryonic forces

4 D) Political forces

5 E) Social forces

Historically, government reputation has

1. A) encouraged new entrants into an industry

2 B) constituted a major entry barrier into major industries

3 C) neither hampered nor encouraged new entrants into an industry

4 D) encouraged the growth of new companies

5 E) none of these choices

An industry can be defined as a group of

1. A) companies offering products or services that are close substitutes for each other

2 B) twenty or more companies offering products or services that are close

substitutes for each other

3 C) companies.

4 D) companies that offer dissimilar products or services

5 E) companies that offer products or services to dissimilar customers

A market segment is a group of

1. A) customers within a market that can be different from each other on the basis of their distinct attributes and specific demands

2 B) companies that produce similar goods or services

3 C) customers within a market that purchase goods or services in similar quantities

4 D) customers within a market that have similar levels of profitability

5 E) none of these choices

The competitive structure of an industry refers to the

1. A) number of segments in the industry

2 B) number and size distribution of companies in the industry

3 C) the number of consumers in the industry

4 D) number of competing products in the industry

5 E) form that competition in the industry takes

Which of the following is not one of the factors in the

economic forces of the macroenvironment?

1. A) Interest rates

2 B) Inflation

3 C) Regulation

4 D) Currency exchange rates

5 E) Economic growth rate

The extent of rivalry among established companies is lowest when

1. A) the industry's product is a commodity

2 B) demand is growing rapidly

3 C) exit barriers are substantial

4 D) the industry is entering a decline stage

5 E) the industry is dominated by a small number of large companies

A group of firms all make writing implements—pens, pencils, and markers This group should be referred to as a(n)

1. A) substitute

2 B) market segment

3 C) sector

4 D) supplier

5 E) industry

Entry barriers in the embryonic stage are frequently based

on

1. A) brand loyalty

2 B) economies of scale

3 C) absolute cost advantages

4 D) economies of scope

5 E) technological know-how

All of the companies in a strategic group are

1. A) pursuing different business models

2 B) of similar size

3 C) pursuing a similar business model

4 D) all of these choices

5 E) none of these choices

In which of the following arenas would Walmart's Sam's Club stores compete against their closest, most intense rivals?

1. A) The retailing sector

2 B) The discount retailing industry

3 C) The club-store discount retailing strategic group

4 D) Sam's Club stores face no close, intense rivals

5 E) Sam's Club stores face close, intense rivals in every arena in which they compete

Which of the following is not a force within the

macroenvironment?

1. A) Level of interest rates

2 B) Currency exchange rates

3 C) Inflation

4 D) Deflation

5 E) Rates of social change

If economies of scale are an industry's primary entry barrier,

a new entrant's major risk is

1. A) its inability to access labor and materials

2 B) the inferior quality of its products

3 C) its inability to match the innovation of the established firm

4 D) its inability to produce in sufficient volume to match the cost advantages of established producers

5 E) its inability to get buyers to switch to its product

Which of the following is not a component of Porter's five forces model?

1. A) Risk of entry by potential competitors

2 B) The intensity of rivalry among established companies within an industry

3 C) The bargaining power of buyers

4 D) The bargaining power of suppliers

5 E) The lack of substitutes for an industry's products

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?

1. A) Economic

2 B) Demographic

3 C) Political and legal

4 D) Social

5 E) Strategic

30 Free Test Bank for Strategic Management Theory

An Integrated Approach 9th Edition Jones True - False Questions

Government deregulation of telephone service lowered the barriers to entry and lowered industry profit margins

1. True

2 False

Even when entry barriers are very high, new firms may still enter an industry if they perceive that the benefits outweigh the costs of entry

1. True

2 False

Strong brand loyalty and high customer switching costs are low barriers to entering an industry

1. True

2 False

Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry

1. True

2 False

High tech industries are often dependent on complementor industries for their mutual success

1. True

2 False

Changes in the characteristics of a population, such as age

or race, is irrelevant to the analysis of an industry’s

macroenvironment

1. True

2 False

High exit barriers are most serious as a competitive threat when industry demand is declining

1. True

2 False

Successful innovation can transform the nature of industry competition

1. True

2 False

One of the key factors in the success of Walmart is the

buying power gained by dealing directly with manufacturers

1. True

2 False

When buyers are in a weak bargaining position, companies

in the supplying industry must lower their prices to increase profits

1. True

2 False

Strategic groups within an industry compete amongst

themselves even though their business models may vary greatly

1. True

2 False

In general, the more that an industry's product is like a

commodity, the lower the intensity of any price war that may develop

1. True