Deck 3: Analysing the External Environment

Question 1

In carrying out a competitive positioning analysis of an industry it is important to:

A)find groups of competitors that use the same approach
B)find groups of competitors that use different approaches
C)use uncorrelated axes
D)use correlated axes

Answer 1

C

Question 2

To gain an understanding of how each market works within an industry we ask:

A)What is the size of key market segments?
B)What is the factor-controller's decision process?
C)How homogenous is the market?
D)What is the proximity level of the market?

Answer 2

A

Question 3

An industry is defined as:

A)all the productive capacity of the national economy
B)a reality based on geography and not a perception
C)a group of business units producing complementary goods and services
D)a group of organisations producing close substitutes

Answer 3

D

Question 4

Porter's 'diamond' model of international competitiveness suggests that where firms cluster,analysis may need to be conducted at:

A)industry level
B)organisation level
C)firm level
D)network level

Question 5

Scenario planning is of most use in industries where there is:

A)slow change
B)rapid change
C)low future uncertainty
D)a lot of data about the past

Question 6

Turbulence that is characterised as discontinuous is:

A)unpredictable
B)changing incrementally at random
C)repeating past events
D)when the past is an unreliable predictor of the future

Question 7

The elements of the macro-environment do NOT include:

A)fashion and brand-image trends
B)legal and political trends
C)demographic and sociocultural trends
D)economic and technological trends

Question 8

Extension of the 'five forces' framework moves it towards:

A)a business system framework
B)a value chain framework
C)both of the above
D)none of the above

Question 9

Porter claims that ___ contribute(s)to intensity of industry rivalry:

A)barriers to exit
B)switching costs
C)absolute cost advantage
D)differentiation of outputs

Question 10

Today,business organisations globally are facing increased pressures to improve their:

A)profitability
B)environmental impact
C)resources
D)global competitiveness

Question 11

The best approach for defining an industry is:

A)through the eyes of its customers.
B)through the eyes of its suppliers.
C)through the eyes of its competitors.
D)through the eyes of its investors.

Question 12

The factors that influence the bargaining power of suppliers include:

A)access to distribution
B)government policy
C)decision makers' incentives
D)brand identity

Question 13

In understanding key customers,it is NOT relevant to know:

A)what they use the product for
B)what the product's key benefits are to them
C)what the product's buying features are for them
D)what they will recommend to others (word of mouth)

Question 14

Porter's 'five forces' do NOT include:

A)threat of new entrants
B)threat of substitutes
C)buyer power
D)threat of complementary products

Question 15

Which of the following statements is true regarding competitive positioning of strategic groups?

A)Firms generally stay within their strategic groups due to various mobility barriers.
B)Strategic groups lack competitors within industries that compete closely against each other.
C)As a strategic group,the airline industry made up of large service carriers has had the ability to migrate to a lost-cost model.
D)Strategic groups are often homogeneous allowing the elements of the five forces model to remain static between different strategic groups.

Question 16

A 'five forces' analysis will suggest that profitability should be high when:

A)all five forces are high
B)all five forces are low
C)the two 'powers' cancel out the two 'threats'
D)industry rivalry is intense

Question 17

Industry analysis aims to answer the question:

A)What are the forces within an industry that determine its size?
B)Based on these forces,what is the current and likely future number of firms in the industry?
C)How are the forces changing and expected to change,over time?
D)How will those changes affect the future size of the industry?

Question 18

Firms which offer complementary products or services that add value to an industry are known as:

A)Complementors.
B)value-adding firms.
C)key determinators.
D)key success factors.

Question 19

Porter's 'diamond' model of international competitiveness does NOT include:

A)absence of related industries and infrastructure
B)favourable factor (supply)conditions
C)government support
D)chance events

Question 20

In the 'maturity' stage of the industry life cycle,the issue is:

A)how to manage industry position
B)how to manage markets and assets
C)how to grow
D)how to avoid decline

Question 21

Industry life cycle models aim to explain organisation and industry growth and decline over time.

Question 22

Government policies and regulations can be a barrier to new entrants in an industry.

Question 23

An industry is defined as a group of organisations producing close substitutes.

Question 24

Industry life cycles are not similar to product life cycles.

Question 25

Ansoff argued that it is important to consider the different levels of turbulence in industries.Briefly discuss each level and give an example of each.

Question 26

Economic trends are often key drivers of industry growth.

Question 27

Using the five forces model,explain when industry profitability will be very high.

Question 28

In an industry analysis in the public sector it is NOT relevant to ask:

A)How does this influence group affect our organisation?
B)Why does this influence group affect our organisation?
C)When will we feel the affect of this influence group on our organisation?
D)What gives this influence group power to affect our organisation?

Question 29

The five forces model is a useful tool of analysing an industry.Briefly discuss the five forces.

Question 30

What are the benefits of scenario planning as an alternative to the five forces model?

Question 31

Why should the concept of an industry also include a geographic element,as well as the group of organizations that define it?

Question 32

A local council can be treated as a geographic monopoly in competition with other geographic monopoly councils for funds from the common provider.

Question 33

Pensions are one of the largest costs to government and they are expected to decrease dramatically over time.

Question 34

Not many countries are affected by major technology changes.

Question 35

In Australia,if a product gains entry to the government's Pharmaceutical Benefits Scheme,the government does not subsidise its cost to users.

Question 36

Scenario planning is an alternative approach in which several different scenarios are developed so that the organisation can consider how it would position itself under each.

Question 37

Critical success factors vary across industries.

Question 38

'Analysis of the macro-environment is a waste of time and effort for all but the largest corporations.' Discuss the relevance of this observation.

Question 39

The diamond model framework highlights the role of government.

Question 40

If it is difficult or costly to withdraw from an industry,competitors may decide to stay in the industry even if they are making losses.

Question 41

When is the five forces model most appropriate for not-for-profit organizations? Discuss.

Question 42

In an industry,not all competitors compete directly with each other.Comment.

Question 43

Explain what four components from Porter's original diamond model provide a basis for understanding when internationally competitive industries will be successful in some regions or countries.What are two other elements in the diamond model and why are they important?