Deck 3: Industry Analysis

Question 1

Porter's Five Forces framework is derived from principles from which academic field?

A) Economics
B) Game theory
C) Bounded rationality
D) Organizational behaviour

Answer 1

A

Question 2

Porter's Five Forces is used to analyse: Please select all that apply.

A) The industry environment
B) The competitive environment
C) The macro-environment
D) The general environment

Answer 2

A, B

Question 3

When comparing SWOT analysis framework with Porter's Five Forces, one can say: Please select all that apply.

A) SWOT analysis is industry-specific while Porter's five forces is company-specific.
B) The five forces framework allows an organization to make informed decision about whether an industry is attractive to stay or invest in.
C) Accurately estimating future trends in the five forces should also provide an organization with an indication of future profits.
D) SWOT analysis is only undertaken from the perspective of an incumbent firm.

Answer 3

B, C

Question 4

The more difficult it is for a new organization to enter an industry, the more intense the competition will be in the industry.

Question 5

____ as an entry barrier is further strengthened because the major oil companies are vertically integrated. They compete in different stages of production and distribution; that is, both upstream (extraction of oil) and downstream (sale of products to the consumer).

Question 6

In Porter's Five Forces, supplier power is high if: Please select all that apply.

A) The supplier technology is difficult for the buying firm to understand
B) There are many suppliers to chose from
C) Switching costs are low
D) There are few suppliers to chose from

Question 7

In Porter's Five Forces, buyer power is high if: Please select all that apply.

A) There are few substitutes
B) Switching costs are low
C) There is adequate access to information about the product
D) There are few suppliers to chose from

Question 8

In Porter's Five Forces, competitive rivalry will be high if: Please select all that apply.

A) There is little differentiation.
B) There are high exit barriers.
C) It is a mature market.
D) It is a fragmented industry.

Question 9

The supermarket industry in the UK has low competitive rivalry.

Question 10

Which of the following statements is NOT a criticism of Porter's Five Forces? Select all that apply.

A) It is based in economic theory.
B) It is tautological.
C) Industries are difficult to define.
D) It is overly concerned with external factors.

Question 11

Porter suggests the use of a specific set of ________________ strategies which enable the organization to position itself in such as way as to mitigate the impact of the five forces in that particular industry.

Question 12

A zero-sum game is where no player can win in a particular situation.

Question 13

Porter's Five Forces has been accused of assuming a zero-sum gain.

Question 14

It has been suggested that Porter's Five Forces needs to include additional aspects to make it more meaningful. These include: Please select all that apply.

A) Complementors
B) Collaborators
C) Power of government
D) Power of Uncertainty

Question 15

What main criticism do Mintzberg and Waters (1985) have of Porter's Five Forces framework?

A) There are not enough forces.
B) The model needs to be more dynamic.
C) Emergent strategies are not considered.
D) There is little consideration of internal resources.

Question 16

Porter's Five Forces is of limited use in a young industry.

Question 17

Porter's Five Forces framework has been accused of being a ________________ analysis assuming relatively stable markets.

Question 18

Brandenburger and Nalebuff (1996) developed the concept of the ___________ to represent a map of the whole game, the players in the game and their relationships with each other.

Question 19

A Lexus car and a van are in the same market.

Question 20

Strategic group analysis is useful because: Please select all that apply.

A) It helps to identify mobility barriers of moving to a different group.
B) It aids identification of strategic space.
C) It predicts a competitor's next move.
D) It aids understanding of the historical development of a particular industry.

Question 21

In essence, an organization needs to create value and a larger market, which is best undertaken by cooperating with customers and competitor.

Question 22

Which of the following industries is likely to follow the industry life cycle stages from introduction to decline?

A) Cars
B) Travel
C) Digital cameras
D) Hairdressing

Question 23

A _____________ can be defined as 'a group of firms within an industry following similar strategies'.

Question 24

Factors that prevent the movement of organizations from one strategic group to another are known as _________________.

Question 25

Strategic group analysis is useful because: Please select all that apply.

A) It helps to identify mobility barriers of moving to a different group.
B) It aids identification of strategic space.
C) It predicts a competitor's next move.
D) It aids understanding of the historical development of a particular industry.

Question 26

By undertaking strategic group analysis, an organization can better understand its industry structure by mapping rivals following similar into ________ strategic groups.

Question 27

The term _________________ was introduced by D'Aveni (1994) to explain a relentless mode of competitive behaviour that aims to force competitors out of the industry.

Question 28

Christensen's disruptive innovation describes a competitive pathway for small business to gain a foothold in the market and subsequently success.

Question 29

Larry Downs and Paul Nunes argue that the strategic model of disruptive innovation has a blind spot. Please select all that apply.

A) The disruption described by Christensen allows incumbent businesses some time to develop their own new products as they see their market being eroded.
B) When the disruption does not come from competitors within the same industry or organizations with vaguely similar business models.
C) Entrants target these neglected segments by offering them products with more suitable functionality, invariably at a lower price. Entrants thereby gain a foothold in the market
D) When organizations do not enter at the bottom of a mature market and continue to more through profitable segments.