Deck 5: A Dynamic Model of Industry Structuring

Question 1

The most profound changes in an industry are seldom produced by industry "outsiders."

Answer 1

False

Question 2

Which of the following is not a characteristic pattern of attack that new entrants employ to gain entry into an industry?

A) Entry on the periphery of the entry
B) Offering new products or services that capitalize on changes in more than one industry dimension
C) Offering new products or services that focus on change in one industry dimension
D) Engaging in entrepreneurial judo
E) None of these

Answer 2

C

Question 3

Which of the following is not a characteristic reactive response of managers of incumbent firms to the threat of new entrants?

A) Withdrawing to a supposedly "safer" area in the competitive space
B) Diversifying product and services offerings
C) Abandoning the market or industry segment to redeploy resources
D) Improving current offerings of products and services

Answer 3

C

Question 4

Competition among incumbent firms will likely _____________ as they begin serving a smaller segment of the industry when withdrawing from market segments invaded by new entrants.

A) decrease
B) increase
C) remain the same

Question 5

Which of the following insights into an industry does a dynamic model of industry structuring provide?

A) How the industry has changed
B) How the industry is likely to change
C) What areas of opportunity exist
D) How the industry is structured
E) All of these

Question 6

Patterns in the evolution of most industries can be explained by all of the following EXCEPT:

A) Changing industry dimensions
B) The limitations, biases, and inertia inherent in managerial thinking
C) The actions of incumbent managers seeking to disrupt the status quo in organizational environments.
D) None of these
E) All of these

Question 7

Which of the following is a sign that a firm has stopped learning?

A) Inattention to the entry of new competitors
B) No monitoring of the competitive landscape
C) The activities of competitors are discounted
D) No perception of the significance of new technological developments
E) All of these

Question 8

Mental models can help managers develop ways of thinking about ______________.

A) how their industries are evolving
B) how new firms are likely to enter their industries
C) how their firms should respond to change
D) A and B only
E) All of these

Question 9

Which of the following is not an assumption of traditional perspectives on industry analysis?

A) Changes in the dimensions of industries are relatively unimportant
B) The size and shape of the competitive space are relatively stable over time
C) Industries do not remain in equilibrium
D) The focus of competition remains fixed on traditional patterns of interaction between participating firms

Question 10

As one or more of the dimensions in an industry changes, how is the competitive space in the industry affected?

Question 11

Why do managers often fail to notice and accurately assess important changes in their firms' industries?

Question 12

What are the positive and negative aspects of industry norms?

Question 13

List three characteristic patterns of attack that new entrants will typically employ to gain entry into an industry.

Question 14

List three patterns that are common in the response of incumbent firms' managers to the entry of new rivals.

Question 15

Why are managers of incumbent firms rarely able to match new entrants' products, services, or technological capabilities?

Question 16

What factors delay the responses of incumbent firms in countering the initiatives of the new entrants?

Question 17

Why would labeling customer groups based on chronological age might not be particularly useful for analyzing the customer dimension of the automobile industry?

Question 18

Why is organizational learning more important than the imitation or copying of other firms?

Question 19

Southwest Airlines expanded the airline industry along the __________ and ____________ dimensions.

A) Technology, Product/Services
B) Customer, Technology
C) Customer, Product/Services
D) Technology, Processes
E) None of these

Question 20

Firms in high-tech industries have come to expect that microprocessor capability will double every 18 months based on __________ Law.

A) Krankheit's
B) Abell's
C) Jobs'
D) Moore's
E) Hamel's

Question 21

Abell's conceptualization of an industry as a "competitive space" included all of the following dimensions except:

A) Who?
B) What?
C) When?
D) How?
E) None of these

Question 22

The competitive dynamics of many industries are inconsistent with structuralist views of industries.

Question 23

The Five Forces Model is particularly helpful in anticipating how industries will evolve over time.

Question 24

Apple Computer used its foresight and entrepreneurial creativity to transform the computer industry along three of its most important dimensions.

Question 25

Industry incumbents tend to be more reactive than proactive in their responses to the threats posed by new entrants to the industry.

Question 26

Traditional perspectives on industry analysis assume that the focus of competition remains fixed on the traditional patterns of interaction among participating firms.

Question 27

Traditional perspectives on industry analysis assume that changes in the dimensions of industries are very significant to the survival of incumbent firms.

Question 28

Demographic changes and the emergence of new customer wants and needs can create new competitive space.

Question 29

New entrants can introduce products and services that expand the competitive space of an industry along both the product/service and the customer dimensions.

Question 30

Online booksellers reduced the competitive space for traditional bookstores.

Question 31

Changes in one or more of the dimensions of an industry can create new areas of opportunity that are readily accessible only to incumbent firms.

Question 32

Defining the nature of a competitive threat is a problem for the managers of incumbent firms in an industry.

Question 33

Managers of complex organizations often develop and implement sophisticated strategies that are based on assumptions or understandings of the environment that may no longer be appropriate.

Question 34

The first-mover advantages of new rivals are likely to persist for a short time only.

Question 35

Incumbent firms can gain long-term benefits with a strategic withdrawal from market segments invaded by new entrants.

Question 36

Managers often fail to respond effectively or to anticipate changes in their industries for which of the following reasons?

A) biases
B) limitations
C) inertia
D) A and B only
E) All of these

Question 37

Why is it important for firms to beware of their own success?