Question 1

Provide one example of a crowdsourcing success.

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Question 2

Technological advances have affected industry forces in ways that have created many new strategic challenges.

Accepted Answer

Technological advances have significantly impacted industry forces by altering competitive landscapes, creating new opportunities and threats, and necessitating novel strategic approaches to maintain or achieve competitive advantage.

Question 3

Despite being simple, the SWOT analysis is quite popular. Explain the reasons why you think this is so.

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Question 4

Using the Canadian beer as an example, explain how an industry or competitive environment might be defined and analyzed.

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Question 5

If all strategic groups are moving in a similar direction, this could indicate a high degree of future volatility and intensity of competition.

Accepted Answer

If all strategic groups are moving in a similar direction, then they are likely competing for the same market segment and resources. This could lead to increased rivalry and volatility as they fight to gain an advantage.

Question 6

Explain how competitor intelligence can be improved by gathering information about competitors in the public domain. Provide examples.

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Question 7

Explain why managers must recognize opportunities and threats in their firm's external environment.

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Question 8

Opportunities and threats are environmental conditions external to the firm. Drawing on any environment you like, provide two examples of opportunities and two examples of threats that may impact an organization.

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Question 9

Because the Internet creates more tools and means for competing, rivalry among firms is likely to be less intense.

Accepted Answer

The Internet increases competition by providing more information and options to consumers, making it easier for new entrants to reach the market, thus intensifying rivalry among firms.

Question 10

Rivalry is most intense when there are high exit barriers and high industry growth.

Accepted Answer

Rivalry is most intense when there are high exit barriers and low industry growth, as companies cannot easily leave the market and fight over limited opportunities.

Question 11

The use of the strategic groups concept is generally not helpful in charting the future directions of firms' strategies.

Accepted Answer

The strategic groups concept is helpful because it allows firms to understand the competitive landscape, identify opportunities and threats, and thus more effectively chart future strategic directions by analyzing the strategies of groups of firms within the same industry that have similar business models or strategies.

Question 12

The strategic groups in the world-wide automobile industry have been very stable and unchanging in recent years.

Accepted Answer

The strategic groups in the world-wide automobile industry have been changing in recent years due to the emergence of new technologies, changing consumer preferences, and increasing competition from new entrants.

Question 13

The more attractive the price/performance ratio of substitute products, the more tightly it constrains an industry's ability to charge high prices.

Accepted Answer

A more attractive price/performance ratio of substitute products means consumers have appealing alternatives, which limits the industry's capacity to set high prices without losing customers to those substitutes.

Question 14

Michael Porter's five forces analysis is a dynamic tool for analyzing industry attractiveness.

Accepted Answer

Michael Porter's five forces analysis is a static tool, designed to assess the competitive environment of an industry at a specific point in time, rather than dynamically over time.

Question 15

The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration.

Accepted Answer

This statement is true. If suppliers are able to credibly threaten to enter the market or sell directly to the customers, this enhances their bargaining power and gives them a stronger position in negotiations with their buyers.

Question 16

Rival airlines, Air Canada and WestJet are battling over allegations of corporate espionage.

Accepted Answer

Air Canada and WestJet have been involved in disputes over allegations of corporate espionage, where one is accused of spying on the other to gain competitive advantages. This reflects the intense competition in the airline industry.

Question 17

Explain the important barriers to entry in an industry. Provide examples.

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Question 18

Bombardier studies people's travel patterns to decide on the number of seats they should plan for future aircraft.

Accepted Answer

Bombardier, like other aircraft manufacturers, studies people's travel patterns and market demand to decide on the number of seats and the design of future aircraft to meet the anticipated needs of airlines and passengers.

Question 19

Discuss some of the limitations of forecasting.

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Question 20

Many indicators of the macroeconomic environment such as GNP, interest rates, savings rates, trade and budget deficits/surplus, and so forth, are interrelated. Explain.

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Quiz 2: Analyzing the External Environment of the Firm