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Exam 2: Industry Competition

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Question 21

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A key indicator of intense rivalry among firms is low cost competitive actions and reactions.

A) True
B) False

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Question 22

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Which of the following is NOT true regarding supplier relationships? a. Supplier relationships that are too close may introduce rigidities, including loss of flexibility. b. In Japan suppliers may become trusted members of the keiretsu. c. In Japan, instead of treating suppliers as adversaries, they are treated as collaboration partners. d. In view of A through C above, supplier relationships in Japan tend to be ineffective. e. In view of A through C above, close supplier relationships are not necessarily good or bad.

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In view of A through...

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Question 23

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Maximizing opportunities and minimizing threats presented by the five forces provides some answers to which of the following questions? a. Why do firms differ? b. How do firms behave? c. What determines the scope of the firm? d. What determines the international success and failure of firms? e. All of the above.

Which of the following would tend to reduce the bargaining power of suppliers? a. Dominance of the supplier industry by a few firms. b. Suppliers provide unique, differentiated products with few or no substitutes. c. Focal firm is not an important customer. d. Unwillingness and inability of suppliers to integrate forward. e. None of the above.

Strategies of firms within a strategic group tend to be different and so does their performance.

A key proposition of the five forces framework is that industry structure is unrelated to firm performance and the strength of the five forces.

An industry is defined as a group of firms producing goods and/or services that are similar to each other.

The relative bargaining power of the focal firm and (according to the traditional view) the degree of integration helps answer which of the following questions? a. Why do firms differ? b. How do firms behave? c. What determines the scope of the firm? d. What determines the international success and failure of firms? e. All of the above.

Porter's five forces framework: a. Identifies relevant variables but fails to ask the needed questions. b. Identifies only questions to ask. c. Identifies both relevant variables and questions to ask. d. Eliminates the need for other frameworks to add insight about firm performance. e. None of the above.

The industry-based view recommends: a. Backward integration as a way to defend against the power of suppliers. b. Backward integration as a way to defend against the power of buyers. c. Forward integration as a way to defend against the power of suppliers. d. Forward integration as a way to defend against the power of buyers. e. Backward or forward integration as a way to defend against the power of suppliers and buyers.

Which is generally NOT true of differentiation? a. Difficult to sustain basis of differentiation in the long run. b. Relentless efforts of competitors to duplicate differentiation. c. Key areas of application include research and development, marketing/sales and after-sale services. d. It is a challenge to identify attributes that are valued by customers in each market segment. e. Inability to pass on suppliers' price increases to buyers.

The five forces model overemphasizes threats and downplays opportunities.

Recent work favors outsourcing and willingness to collaborate with suppliers/buyers, as well as competitors.

The ultra luxury automobile market is characterized by: a. Little competition in the past - but that is changing. b. A small number of cars produced each year - but they are very expensive. c. Being the same as the luxury market. d. A and B above. e. None of the above.

If a low-cost firm has already achieved the maximum efficient scale, it must turn to differentiation to distinguish itself from competitors.

A systematic foundation for industry and competitor analysis is best provided by: a. The industry-based view. b. Resource-based view. c. Historical view. d. Macro analysis. e. None of the above.

Many high-technology industries are characterized by network externalities. What are those externalities and how can they pay off?

High exit costs from an industry tend to reduce the intensity of rivalry.

A focused firm avoids being either a specialized differentiator or a specialized cost leader.

Which is a reason for outsourcing as opposed to integration? a. Less expense. b. Strategic flexibility is enhanced. c. Those outside the firm are often more competitive. d. The activity is not crucial to the core business. e. All of the above.