Q&A Hero

Q: Aquafina operates in the bottled water industry. The companies that offer identical or similar products and go after the same customers that Aquafina does are Dasani and Zephyrhills. Dasani and Zephyrhills are Aquafina's ________ competitors. A) direct B) indirect C) future D) impending E) potential

Q: In the context of competitor analysis, businesses that offer identical or similar products are referred to as ________ competitors. A) immediate B) direct C) indirect D) straight E) urgent

Q: According to the textbook, the three different types of competitors a business will face are ________. A) potential, direct, and upcoming B) indirect, fleeting, and future C) serious, cautious, and future D) direct, indirect, and future E) potential, fleeting, and indirect

Q: According to the textbook, the first step in a competitor analysis is to ________. A) develop a marketing plan B) develop the strategic plan C) study the strength of the industry D) study the external environment E) determine who the competition is

Q: What is an emerging industry? What is the primary opportunity available to entrepreneurial firms in emerging industries? Name three examples of firms in emerging industries.

Q: Firms that pursue a multidomestic strategy use the same basic approach in all foreign markets.

Q: A fragmented industry is an industry that is experiencing slow increases in demand, numerous repeat customers, and limited product innovation.

Q: The primary opportunity available to firms in fragmented industries is consolidation. The most common way to do this is through a geographic roll-up strategy, in which one firm starts acquiring similar firms that are located in different geographic areas.

Q: An emerging industry is one that is characterized by a large number of firms of approximately equal size.

Q: A fragmented industry is a new industry in which standard operating procedures have yet to be developed.

Q: Katherine Chapman recently launched a firm in the clothing industry, targeting 13-17 year olds. One thing Katherine thinks she has accomplished is producing products that have universal appeal, so she will not vary her approach from country to country. Katherine is pursuing a ________ strategy. A) universal B) multidomestic C) contemporary D) global E) home

Q: Kellen West recently launched a firm in the fruit drink industry, and has already exported his fruit drinks to 11 different countries. One thing that Kellen's firm is doing is that it is varying the tastes of the fruit drinks it sells on a country-by-country basis to meet the demands of the local markets. Kellen's firm is pursuing a ________ strategy. A) global B) home C) universal D) contemporary E) multidomestic

Q: Firms that pursue a(n) ________ strategy compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market. A) inclusive B) universal C) multidomestic D) contemporary E) worldwide

Q: The two most common strategies pursued by firms in global industries are the ________ strategy and the ________ strategy. A) inclusive, multidomestic B) multidomestic, global C) multidomestic, worldwide D) inclusive, global E) home, worldwide

Q: A(n) ________ industry is an industry that is experiencing significant international sales. A) global B) mature C) fragmented D) declining E) emerging

Q: Opportunities for leadership, niche, harvest and divestment are associated with ________ industries. A) mature B) emerging C) declining D) fragmented E) global

Q: According to the textbook, Nucor in steel, JetBlue in airlines, and Cirque du Soleil in circuses are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. A) fragmented B) emerging C) declining D) global E) mature

Q: According to the textbook, Chipotle Mexican Grill in fast-casual restaurants and 1-800-GOT_JUNK? in junk removal are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. A) global B) declining C) mature D) emerging E) fragmented

Q: According to the textbook, Justin's in peanut butter, Pure Fix Cycles in bicycles, and Flings Bins in trash bags are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. A) emerging B) fragmented C) declining D) mature E) consolidated

Q: A(n) ________ industry is an industry that is experiencing slow or no increase in demand. A) declining B) global C) mature D) emerging E) fragmented

Q: The primary opportunity existing for startups in fragmented industries is to ________. A) pursue a niche strategy, which focuses on a narrow segment of the industry that might be encouraged to grow through product or process innovation B) win customers by placing an emphasis on service and process innovation C) capture a first-mover advantage D) pursue a cost reduction strategy, which is accomplished through achieving lower costs than industry incumbents through process innovation E) consolidate the industry and establish industry leadership as a result of doing so

Q: A(n) ________ industry is one that is characterized by a large number of firms of approximately equal size. A) fragmented B) mature C) declining D) emerging E) global

Q: The primary opportunity existing for startups in emerging industries is to ________. A) consolidate the industry and establish industry leadership as a result of doing so B) win customers by placing an emphasis on service and process innovation C) pursue a niche strategy, which focuses on a narrow segment of the industry that might be encouraged to grow through product or process innovation D) capture a first-mover advantage E) pursue a cost reduction strategy, which is accomplished through achieving lower costs than industry incumbents through process innovation

Q: Brain Sentry is starting a firm in the small industry that helps football teams discern whether a player has suffered a concussion. This industry is still so new that no standard operating procedures have been developed. The industry Brain Sentry is entering is an example of a(n) ________ industry. A) mature B) declining C) emerging D) global E) fragmented

Q: According to the textbook, the Five Forces model can be used in the following two ways: ________. A) first, to help a firm determine whether it should enter an industry in an aggressive or a conservative manner, and second, to help a firm determine whether to compete in international markets in that industry. B) first, to help a firm determine if it should enter a single or multiple niches in an industry, and second, to help a firm determine whether it can be competitive in that industry C) first, to help a firm determine what industry it is best equipped to compete in, and second, to help a firm determine whether to compete in international markets in that industry D) first, to help a firm determine what niche to enter within an industry, and second, to help a firm determine whether it can be competitive in that industry E) first, to help a firm determine whether it should enter a particular industry, and second, to help a firm discern whether it can carve out an attractive position in that industry

Q: Discuss the nontraditional barriers to entry identified in the chapter. Why is it important that entrepreneurial firms utilize one or more of these forms of barriers to entry?

Q: Identify the five competitive forces that determine industry profitably. Explain the purpose of analyzing these forces?

Q: If the buyers are concentrated and they buy from a large number of suppliers, then the bargaining power of buyers is increased.

Q: In most industries, the major determinant of industry profitability is the level of competition among the firms already competing in the industry.

Q: There are four factors that determine the threat of new entrants: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs.

Q: The best industry to enter is an industry where the threat of each of Porter's five forces is high.

Q: The five competitive forces model is a framework for understanding the structure of an industry.

Q: Tim Rutherford is thinking about starting a firm in the medical equipment industry. In the industry analysis Tim has been conducting, one thing he has noticed is that the medical equipment industry is characterized by buyer group concentration. This factor concerns Tim because it tells him that the profitability of the medical equipment industry is potentially suppressed by the ________. A) threat of substitutes B) bargaining power of buyers C) rivalry among existing firms D) bargaining power of suppliers E) threat of new entrants

Q: Supplier concentration, switching costs, attractiveness of substitutes, and threat of forward integration are factors that have a direct impact on ________. A) threat of new entrants B) bargaining power of buyers C) rivalry among existing firms D) threat of substitutes E) bargaining power of suppliers

Q: Which of the following was not identified in the textbook as a nontraditional barrier to entry? A) Strength of management team B) First-mover advantage C) Unique business model D) Product differentiation E) Internet domain name

Q: According to the example provided in Chapter 5, www.1800contacts.com possesses a nontraditional barrier to entry referred to as ________. A) unique business model B) strength of management team C) access to distribution channels D) Internet domain name E) first-mover advantage

Q: If a startup pioneers an industry or a new concept within an industry, the name recognition the startup establishes may create a formidable nontraditional barrier to entry referred to as a(n) ________. A) unique business model B) aggressive supremacy C) competitive superiority D) first-mover advantage E) aggressive tactical advantage

Q: Which of Porter's five forces is most directly influenced by the number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs? A) Threat of new entrants B) Rivalry among existing firms C) Threat of substitutes D) Bargaining power of buyers E) Bargaining power of suppliers

Q: Some industries, like the athletic shoe industry, are dominated by a small number of firms with strong brands. These industries are difficult to break into without spending heavily on advertising. The barrier to entry that the firms in these types of industries have erected is referred to as ________. A) government and legal barriers B) capital requirements C) product differentiation D) cost advantages independent of size E) access to distribution channels

Q: Shelly Brunner owns a sports-themed restaurant which is located in an upscale business district in Chicago. One advantage that Shelly has is that she bought the lot she built her restaurant on 25 years ago when lots in the area were selling for $50,000. Shelly knows that several potential competitors have looked at bare lots near his business but haven't been willing to pay the asking prices, which are as high as $500,000. Which of the six major sources of barriers to entry is causing a disincentive for new firms to enter Shelly's industry? A) Capital requirements B) Economies of scale C) Product differentiation D) Government and legal barriers E) Cost advantage independent of size

Q: Which of the following is not one of the major sources of barriers to entry? A) Product differentiation B) Capital requirements C) Buyer group concentration D) Access to distribution channels E) Government and legal barriers

Q: Which of Porter's five forces is most closely associated with the concept "barrier to entry"? A) Bargaining power of suppliers B) Rivalry among existing firms C) Threat of new entrants D) Bargaining power of buyers E) Threat of substitutes

Q: The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces explains how this aspect of the prescription medicine industry helps keep profitability high? A) Rivalry among existing firms B) Threat of new entrants C) Threat of substitutes D) Bargaining power of buyers E) Bargaining power of suppliers

Q: Generally, industries are more attractive when the threat of substitutes is ________. A) high B) low C) neutral (neither high or low) D) high for manufacturing firms and low for service firms E) high for service firms and low for manufacturing firms

Q: In general, industries are more attractive when the ________. A) majority of the threats are high B) majority of the threats are low C) threat of each of the forces is neutral-neither low nor high D) threat of each of the five forces is high E) threat of each of the five forces is low

Q: According to the textbook, how do well-managed firms respond to the five forces that determine industry profitability? A) They switch industries if the forces are too compelling. B) They focus on one force intently and excel by overcoming that force. C) They overcome each of the forces. D) They ignore the forces. E) They try to position their firms in a way that avoids or diminishes the forces.

Q: According to the textbook, the five competitive forces included in the Five Forces model determine the average ________. A) rate of new business starts in an industry B) growth rate for the firms in an industry C) rate of return for the firms in an industry D) sales for the firms in an industry E) failure rate for the firms in an industry

Q: What is industry analysis? Why is it important for a new venture to complete a thorough analysis of the industry it is entering?

Q: Business trends include economic trends, social trends, technological advances, and political and regulatory changes.

Q: The two trends that are most important to focus on in an industry analysis are business trends and environmental trends.

Q: An industry is a group of firms producing a similar product or service, such as tires, life insurance, or smartphone apps.

Q: A comparison analysis is a detailed evaluation of a firm's competitors.

Q: Industry analysis is business research that focuses on the potential of an industry.

Q: The Partnering for Success feature in Chapter 5 focuses on three things that are important for startups to become active in to learn the ins and outs of their industries. The three items focused on in the feature are ________. A) local Chambers of Commerce, trade journals, and networking events B) Facebook, industry-related e-mail listservs, and trade shows C) trade associations, trade shows, and trade journals D) networking events, blogs, and Facebook E) local Chambers of Commerce, city or university-sponsored incubators, and trade associations

Q: Many firms benefit from an increasing ability to outsource manufacturing or service functions to lower-cost foreign countries. This trend is referred to in the textbook as a(n) ________ trend. A) business B) environmental C) commerce D) statutory E) economic

Q: Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important ________ trend. A) environmental B) business C) commerce D) statutory E) competitive

Q: In various studies, researchers have found that from ________ percent of the variation in firm profitability is directly attributable to the industry in which a firm competes. A) 4 to 12 B) 8 to 30 C) 18 to 42 D) 22 to 56 E) 34 to 70

Q: Each quarter, Craig Anderson, who owns a chain of auto repair shops, does a detailed analysis of his firm's competitors. This analysis is called ________ analysis. A) competitor B) challenger C) strategic D) participant E) industry

Q: Once a firm decides to enter an industry and chooses a market in which to compete, it must gain an understanding of its competitive environment. This challenge can be undertaken by completing a(n) ________ analysis. A) business B) industry C) competitor D) strategic E) market

Q: A(n) ________ is a group of firms producing a similar product or service, such as soft drinks, airlines, or smartphone apps. A) cluster B) division C) sector D) industry E) network

Q: Terry Washington recently started a new firm in the financial services industry. Prior to starting his firm, he spent considerable time doing research on the potential of the industry. The research that Terry was doing is called ________ analysis. A) industry B) sector C) commercial D) business E) target market

Q: Greenvelope, the company profiled in the opening feature of Chapter 5, believes it has created sufficient barriers to entry to enable it to maintain a leadership position in the invitation industry. Its barriers to entry include ________. A) the price-point of its products, the amount of its funding, the strength of its management team, and its partnership with a major player in the invitations industry B) its intellectual property, the strength of its brand, its international presence, and its access to distribution channels C) the strength of its brand, its network of freelance designers, its social mission, and the functionality of its Web site. D) the innovative nature of its products, its network of freelance designers, the strength of its management team, and economies of scale E) its international presence, the price-point of its products, its social mission, and the innovative nature of its products

Q: In the Barringer/Ireland Business Model Template, ________ describes how the firm plans to compete relative to its competitors. A) strategic plan B) grand strategy C) tactical strategy D) value proposition E) core strategy

Q: Which of the following is not one of the four major categories in the Barringer/Ireland Business Model Template? A) Operations B) Resources C) Channels D) Core strategy E) Financials

Q: The four major categories in the Barringer/Ireland Business Model Template are ________. A) core strategy, resources, financials, and operations B) core strategy, value proposition, customers and channels C) value proposition, resources, customers and partners D) activities, partners, customers, and competitors E) value proposition, cost structure, financials, and operations

Q: The Barringer/Ireland Business Model Canvas consists of ________ major category(ies) and ________ parts. A) 1; 12 B) 3; 9 C) 6; 18 D) 4; 12 E) 2; 6

Q: What is the difference between standard business models and disruptive business models? Include examples of both in your answer.

Q: The Barringer/Ireland Business Model Template has five major categories and 14 individual parts.

Q: According to the textbook, Southwest Airlines introduced a new market disruption type of disruptive business model.

Q: Disruptive business models are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry.

Q: It is important to understand that there are several perfect business models.

Q: Standard business models depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders.

Q: Which of the following firms introduced a disruptive business model? A) Salesforce.com B) eBay C) Panera Bread D) Barnes & Nobel E) J. Crew

Q: There are two types of disruptive business models ________ and ________. A) low-end; high-end B) new-product; new-market C) new-market; low-end D) new-channel; high-quality E) standard; unique

Q: Southwest Airlines is an example of a ________ disruptive business model. A) low-end B) new-market C) high-quality D) new-product E) new-channel

Q: Google and its AdWords program is an example of a ________ disruptive business model. A) low-end B) new-market C) high-quality D) low-price E) new-channel

Q: ________ business models are ones that do not fit the profile of standard business models, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry. A) Disruptive B) Normal C) Unique D) Incomparable E) Exceptional

Q: Which of the following firms has a peer-to-peer business model? A) Dell B) Dropbox C) Airbnb D) Salesforce.com E) Google

Q: Tyler Smith founded a firm that has a subscription-based business model. Although Tyler has averaged 600 new subscribers per month, she also loses 450 subscribers per month. The number of subscribers that Tyler loses each month is referred to as ________. A) erosion B) churn C) destruction D) attrition E) agitation

Q: ________ refers to the number of subscribers that a subscription-based business loses each month. A) Agitate B) Churn C) Erosion D) Attrition E) Stir