Essentials of Strategic Management Chapter 03 Evaluating a Company's External Environment

Essentials of Strategic Management Chapter 03 Evaluating a Company's External Environment

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Chapter 03 1 INCORRECT Which of the following is not one of the questions that needs to be answered in thinking strategically about a company's external environment? A)What kinds of competitive forces are industry members facing, and how strong is each force? B) What are the company's competitively valuable resources and capabilities that can be used to form the foundation of its competitive approach? C)What market positions do industry rivals occupy?who is strongly/weakly positioned and who is not? D)What are the key factors of competitive success? E)What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability? 2 INCORRECT In identifying an industry's dominant economic features, there is a need to consider such things as A) market size and growth rate, the number of buyers, the scope of competitive rivalry, the number of rivals, demand-supply conditions, product innovation, the presence of scale economies and/or learning/experience curve effects, and the pace of technological change. B)the threat of additional entry into the industry and what the industry's key success factors are. C)the strength of competitive pressures from producers of substitute products and which competitors are in which strategic groups. D)the extent and importance of seller-supplier collaborative partnerships, the extent and importance of seller-buyer collaborative partnerships, and the bargaining leverage of sellers and buyers. E)All of these. 3 INCORRECT
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Whether the buyers of an industry's product have strong or weak bargaining leverage over the terms and conditions of sale depends on A)how often that sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently. B)the frequency with which rival firms change strategies and the amount of advertising that sellers utilize. C)whether all buyers have the same degree of negotiating power, whether the item carries a high or low price tag, and whether there are many or few collaborative partnerships between sellers and buyers. D) whether buyers purchase in relatively large or small quantities, whether the costs of switching to competing brands or to substitute products are high or low, and how well informed buyers are about sellers' prices, products, and costs. E)whether buyer demand is seasonal or year-round, whether entry barriers are high or low, and whether competitive pressures from substitutes are strong or weak. 4 INCORRECT Based on both the chapter discussion and the summary in Figure 3.4, competitive pressures stemming from substitute products are weaker when A) substitutes are higher-priced, buyers don't believe substitute products have equal or better features, and buyers' costs of switching to substitutes are relatively high. B)the industry consists of a relatively large number of rival sellers that are fairly equal in size and
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Essentials of Strategic Management Chapter 03 Evaluating a Company's External Environment

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