Question 1

According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT:

Accepted Answer

Low barriers to entry would make an industry less attractive because it would be easier for new competitors to enter the market, increasing competition and potentially reducing profitability.

Question 2

All of the following are implications of strategic groups EXCEPT:

Accepted Answer

The strength of the five forces can vary across strategic groups, as different groups may face different competitive pressures and market conditions.

Question 3

Competitor analysis focuses on:

Accepted Answer

Competitor analysis primarily focuses on firms with which the company competes directly, as these are the most immediate threats to market share and profitability.

Question 4

Firms within strategic groups:

Accepted Answer

Firms within strategic groups follow similar strategies across certain dimensions, such as pricing, quality, or distribution channels, which differentiates them from firms in other strategic groups.

Question 5

Which of the following pairs of companies would be LEAST likely to be examined together as part of competitor analysis?

Accepted Answer

Netflix and Microsoft operate in different primary industries; Netflix is primarily a streaming service, while Microsoft is a technology company with a focus on software, hardware, and cloud services.

Question 6

According to the five forces model, an unattractive industry would include all of the following characteristics EXCEPT:

Accepted Answer

Low supplier power due to commodity inputs is not a characteristic of an unattractive industry; it is actually favorable for companies within the industry as it allows them to have more control over costs.

Question 7

Which of the following represents a competitive intelligence practice that is both legal and ethical?

Accepted Answer

Attending a trade show to gather publicly available information about competitors is a legal and ethical practice in competitive intelligence.

Question 8

A competitor analysis includes all of the following about competitors EXCEPT:

Accepted Answer

Competitor analysis typically focuses on understanding competitors' future objectives, current strategies, and assumptions, but not their traditions. Traditions are not usually relevant to competitive strategy analysis.

Question 9

Circuit Inc.is a manufacturer of a broad range of consumer electronics products.These consumer products are all highly profitable.The firm also manufactures a low-cost component that is an essential differentiating feature for most of its consumer products.The costs to manufacture this component have risen sharply in recent months.Internal estimates now indicate the company is breaking even on the manufacture of this component.Which of the following is MOST likely?

Accepted Answer

The component is essential and differentiates Circuit Inc.'s products, indicating high strategic stakes, which makes it likely they will continue manufacturing it despite breaking even.

Question 10

The competition between firms within a strategic group is:

Accepted Answer

Competition within a strategic group is typically greater than the competition between a member of a strategic group and companies outside that group, as firms within the same strategic group often have similar resources, strategies, and target markets, leading to more direct competition.

Question 11

All of the following are ethical sources of data for external analysis EXCEPT:

Accepted Answer

Confidential memos are private and accessing them without permission is unethical.

Question 12

Which of the following intelligence-gathering techniques is MOST likely to be legal and ethical?

Accepted Answer

Attending trade show presentations is a legal and ethical way to gather information, as these events are public and intended for sharing information.

Question 13

An owner of a stable of racehorses has been earning below-average returns for more than 15 years.To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of:

Accepted Answer

High barriers to exit can lead individuals to continue in a business despite poor returns, as leaving the industry might involve significant costs or losses.

Question 14

Which of the following explains, in part, why rivalry among McDonald's, Wendy's, and Burger King is intense?

Accepted Answer

These companies are trying to differentiate their products to stand out in a highly competitive market, which intensifies rivalry.

Question 15

Competitor intelligence could ethically come from all of the following EXCEPT:

Accepted Answer

Eavesdropping is considered unethical as it involves secretly listening to private conversations without consent.

Question 16

Once a firm has determined its competitors' future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop a(n):

Accepted Answer

A response profile is developed to anticipate and plan for how competitors might respond to the firm's actions based on their objectives, strategies, assumptions, and strengths and weaknesses.

Question 17

The U.S.Hispanic market is the third largest "Latin American" economy behind Brazil and Mexico.This impacts the __________ aspect of demographic segment analysis.

Accepted Answer

The statement highlights the significance of the Hispanic market in the U.S., which directly relates to the ethnic mix aspect of demographic segment analysis.

Question 18

Clarissa is a sales representative for a large pharmaceutical firm.While calling on one of her major clients, the purchasing director of a hospital, the client told her confidential information that a sales representative from a competing firm had passed on to him.The information completely contradicts Clarissa's firm's understanding of the competitor's business strategy and would allow Clarissa's employer to gain many of the competitor's clients.Which of the following ethical implications may result from this situation?

Accepted Answer

The ethical dilemma here is the right of competitors not to reveal certain information.

Question 19

Competitor intelligence is:

Accepted Answer

Competitor intelligence involves gathering data and information legally to understand competitors' objectives, strategies, assumptions, and capabilities, helping firms make informed strategic decisions.

Question 20

Exit barriers to a firm include all of the following EXCEPT:

Accepted Answer

Generic assets are not specific to a firm and can be easily sold or transferred, thus they do not constitute an exit barrier.

Quiz 2: The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis