Q&A Hero

Q: Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

Q: Identify and briefly explain any three factors that weaken the competitive pressures stemming from the threat that new firms will enter the industry.

Q: Identify three conditions that tend to make potential entry a strong competitive force.

Q: Identify and briefly explain any three factors that intensify competitive pressures stemming from the threat that new firms will enter the industry.

Q: Identify and briefly describe five common barriers to entering an industry.

Q: Identify five factors that tend to weaken the intensity of competitive rivalry among an industry's member firms.

Q: Identify five factors that tend to intensify competitive rivalry among an industry's member firms.

Q: Identify and briefly explain any four of the factors that influence the strength or intensity of competitive rivalry among an industry's member firms.

Q: Competitive markets are economic battlefields. True or false? Explain.

Q: What are the five competitive forces that comprise the five forces model of competition?

Q: Draw the five forces model of competition and briefly describe the relevance of each of the five forces in determining the overall strength of competitive pressures a company faces. Which of the five competitive forces is typically the strongest?

Q: What are the six key questions that form the framework of thinking strategically about a company's industry and competitive environment?

Q: When evaluating whether an industry's environment presents a company with an above-average profitability and an attractive business opportunity, it primarily involves: A. determining the industry outlook for future profitability. B. determining which firms in the industry have a competitive advantage and how they got their advantage. C. determining the overall strength of the five competitive forces. D. constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group to determine the overall attractiveness of all the strategic groups. E. using value chain analysis to determine the relative cost positions of rival firms and to learn who the industry's low-cost producer is.

Q: In evaluating whether the industry and competitive environment presents sufficiently attractive prospects for both competitive success and attractive profits usually does NOT involve a consideration of which of the following factors? A. The industry's growth potential and whether competitive pressures will likely grow stronger or weaker, and whether strong competitive forces are squeezing industry profitability to subpar levels B. Whether the company occupies a stronger market position than rivals C. Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces D. The severity of the macro-environment problems confronting the industry E. Whether the industry's product is strongly or weakly differentiated

Q: Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity? A. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average B. An assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing, and whether economies of scale and experience curve effects are a key success factor C. Whether there are more than five key success factors and more than five barriers to entry D. Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group E. Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product

Q: Correctly diagnosing an industry's key success factors: A. points to those things that every firm in the industry needs to attend to in order to develop product propositions. B. hints at the firm's ability to generate above-average profitability. C. reveals that the firm's capabilities and resources are aligned with operating practices of industry participants. D. raises a company's chances of crafting a sound strategy. E. raises a company's sustainability dimensions and market characteristics in line with industry dynamics.

Q: Which of the following can aid industries in identifying key success factors? A. Global distribution capabilities B. Crucial product attributes and service characteristics C. Low distribution costs D. Accurate filling of buyer orders E. Short delivery time capability

Q: Which of the following is NOT a question asked to deduce a marketing-related key success factor? A. What are the industry product R&D capabilities and expertise in product design? B. On what basis do buyers choose between the competing brands of sellers? C. What product attributes and service characteristics are crucial? D. What resources must a company have to be competitive? E. What shortcomings are almost certain to put a company at a significant disadvantage?

Q: In identifying an industry's key success factors, strategists should: A. try to single out all factors that play a major role in shaping whether buyer demand grows rapidly or slowly. B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage. C. consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak. D. consider what it will take to overtake the company with the industry's overall best strategy. E. focus their attention on what it will take to capitalize on the impacts of the industry's driving forces.

Q: An industry's key success factors can always be deduced by asking what factors: A. are a function of market share, entry barriers, and economies of scale, degree of vertical integration, and industry profitability that are advantageous. B. vary according to whether an industry has high or low long-term attractiveness. C. such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage. D. can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies. E. depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

Q: The key success factors in an industry: A. are those competitive factors that most affect industry members' abilities to prosper in the marketplacethe particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss. B. are determined by the industry's driving forces, which are essential to surviving and thriving in the industry. C. hinge on how many different strategic groups the industry has operating within the industry and their level of profitability and sustainable advantages. D. depend on how many rivals are trying to move from one strategic group to another without losing momentum. E. are a function of such considerations as how many firms are in the industry, how many have market shares above 5 percent, and whether the business models being used are similar or diverse.

Q: Information regarding the four components of the Framework for Competitor Analysis can NOT be: A. gleaned from company press releases. B. gathered from a rival's internal proprietary strategic information. C. assembled from website data. D. observed from public information. E. garnered from competitive intelligence departments.

Q: The extent to which firms are meeting objectives suggests they: A. are likely to prosper in the future. B. are likely to continue their present strategy with only minor fine-tuning. C. are virtually certain to make fresh strategic moves. D. recognize "status quo" as the best course of action to adopt. E. realize refocusing will ensure competitive gains.

Q: A rival's strategic moves and countermoves are: A. indicators for the visualization of strategic mapping techniques. B. enabled and constrained by the set of capabilities they have at hand. C. measured by the extent to which they can unveil financial objectives. D. responses to the broader definition of the industry opportunities. E. signs of the competitive pressures from the industry.

Q: Amanda owns one of two bakery stores in her neighborhood. Which of the following questions would NOT help Amanda predict the next strategic moves and countermoves of her rivals? A. Which mode of transport does the rival's supplier use? B. How does her rival manage door-to-door deliveries at no extra cost? C. What percentage of customer frequent her rival's store? D. Why are her rival's cupcakes so popular among customers? E. When does her rival undertake special orders for custom cakes?

Q: Good intelligence about the strategic direction and likely moves of key competitors allows a company to determine which competitors have all of the following, EXCEPT: A. the best strategy. B. flawed or weak strategies. C. strong performance objectives. D. reliable resources and capabilities. E. similar competitive approaches.

Q: Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because: A. it identifies who the industry's current market share leaders are. B. it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence. C. it helps identify which rival is in which strategic group. D. it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. E. it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

Q: The payoff of good scouting reports on rivals is an improved ability to:A. anticipate what moves rivals are likely to make next.B. determine which rivals are in the best strategic group.C. figure out how many key success factors a rival has.D. determine whether a rival is gaining or losing market share.E. determine whether a rival has the best strategy and is the industry leader.

Q: Strategic group map analysis does NOT entail drawing conclusions about: A. where on the map is the best place to be and why. B. which companies/strategic groups are destined to prosper because of their positions. C. which companies/strategic groups seem destined to struggle. D. what accounts for why some parts of the map are better than others. E. where on the map is the easiest position to shift from to a more favorably situated position.

Q: One of the things that can be gleaned from a strategic group map of industry rivals is: A. which rivals have been in business longer and thus have greater access to experience curve effects. B. which rivals have newer manufacturing facilities and thus have achieved greater product quality. C. which strategic groups have the highest profit margins and the highest customer switching costs and thus represent key operating characteristics. D. that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces. E. which strategic groups are currently being shunned by customers because of high prices and relatively low product quality.

Q: With the aid of a strategic group map, one can: A. identify easily the entry and exit barriers for each strategic group. B. pinpoint precisely which firms are in profitable strategic groups and which are not. C. identify which competitive forces are strong and which are weak. D. measure accurately whether across-group rivalry is stronger than within-group rivalry, and vice versa. E. reveal which companies are close competitors and which are distant rivals, and that not all positions on the map are equally attractive.

Q: Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?A. The variables chosen as axes for the map should indicate important differences among rival approaches.B. The variables chosen as axes for the map don't have to be either quantitative or continuous. They can be discrete variables.C. The variables chosen as axes for the map should be highly correlated.D. Several maps should be drawn if more than one pair of variables give different exposures to the competitive positioning relationships present in the industry structure.E. The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

Q: In mapping strategic groups: A. one strategic variable and one financial variable should be used as axes for the map. B. it is important for the variables used as axes to be highly correlated. C. the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry. D. it is important to use price as the variable for the vertical axis. E. the primary objective is to determine which strategic groups are profitable and which are not.

Q: The concept of strategic groups is relevant to industry and competitive analysis because: A. firms in the same strategic groups are rarely close competitorsa firm's closest competitors are usually in distant strategic groups. B. strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors. C. competition grows in intensity as the number and diversity of the strategic groups in an industry increases. D. the profit potential of firms in the same strategic group is usually very similar. E. competitive pressures tend to be weaker within strategic groups than across strategic groups.

Q: Which of the following pairs of variables is LEAST likely to be useful in drawing a strategic group map? A. Geographic market scope and degree of vertical integration B. Brand name reputation and distribution channel emphasis C. Product quality and product-line breadth D. Level of profitability and size of market share E. Price/perceived quality and image range and the extent of buyer appeal

Q: Strategic group mapping is a visual technique for displaying: A. how many rivals are pursuing each type of strategy. B. which companies have the biggest market share and who the industry leader really is. C. the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors. D. which companies have the highest degrees of brand loyalty. E. which companies have failing business models.

Q: An industry contains one strategic group when all sellers: A. are subject to the same driving forces. B. place about the same emphasis on various distribution channels. C. use the same key success factors to differentiate their products. D. pursue essentially identical strategies and have similar market positions. E. pursue varying distribution channels and product attributes, and have customer service attributes that differentiate them in the marketplace.

Q: A strategic group:A. consists of those industry members that are growing at about the same rate and have similar product line breadth.B. includes all rival firms having comparable profitability.C. is a cluster of industry members with similar competitive approaches and market positions in the market.D. consists of those firms whose market shares are about the same size.E. is made up of those firms having comparable profit margins.

Q: What is the best technique for revealing the different market or competitive position that rival firms occupy in the industry? A. Strategic group mapping B. PESTEL analysis C. Five forces framework D. The value net framework E. Competitor analysis

Q: Driving-forces analysis has: A. speculative value because it compels the firm to drive strategic intent and collective choice into operating practices. B. theoretical value because it allows managers to visualize the many different dimensions of the preferred forces that allow for industry functionality. C. practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead. D. no real analytical value because the driving forces are already established in the marketplace and it is too late to make astute and timely strategy adjustments. E. perceived value and is associated with identifying the close and distant rivals within an operating industry.

Q: The real payoff of driving forces is to help managers understand:A. what strategy changes are needed to prepare for the impacts of the driving forces.B. the overall strength of the five competitive forces.C. whether the industry's strategic group map will be static or dynamic.D. what conditions exist in the economy at large.E. the extent to which rivals have more than two competitively valuable competencies or capabilities.

Q: Which of the following is NOT an integral part of driving-forces analysis? A. Determining whether forces are acting to cause fundamental changes in industry conditions and/or the industry's competitiveness B. Determining whether forces are acting to cause industry rivals to shift to a different strategic group C. Determining whether forces are acting to strengthen or weaken market demand D. Determining whether forces are acting to make competition more or less intense E. Determining whether forces are acting to raise or lower industry profitability

Q: In analyzing driving forces, the strategist's role is to: A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability. B. predict future marketing innovations and how fast the industry is likely to globalize. C. evaluate what stage of the life cycle the industry is in and when it is likely to move to the next stage. D. determine who is likely to exit the industry and what changes can be expected in the industry's strategic group map. E. forecast fluctuations in product demand and how buyer needs will most likely change.

Q: Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and generally are: A. determined by the sizes of strategic groups and the power of rival firms' competitive strategies. B. defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years. C. the cause of a reduction in the bargaining power of buyers. D. triggered by movement in the economy, higher or lower interest rates, or important new strategic alliances. E. triggered by such factors as growing competitive pressures from substitute products, and the efforts of rival firms to employ new or different offensive strategies.

Q: Driving-forces analysis helps managers identify whether: A. the collective impact of the driving forces will act to increase/decrease market demand, increase/decrease competition, and raise/lower industry profitability in the years ahead. B. it will become more or less important to aim the company's strategy at being the industry's low-cost producer. C. the driving forces will have a bigger impact on company profitability than competitive forces. D. the industry is likely to become more or less vertically integrated and why. E. competitive advantages are likely to grow or diminish in importance.

Q: Increasing globalization of the industry can be a driving force because: A. the products of foreign competitors are nearly always cheaper or of better quality than those of domestic companies. B. foreign producers typically have lower costs, greater technological expertise, and more product innovation capabilities than domestic firms. C. companies need to spread their operating reach into more and more country markets to meet consumer demand and take advantage of available operating activities. D. it results in companies having fewer competitors and a strategic group map with fewer circles. E. market growth rates go up, product innovation speeds up, and new firms are likely to enter the industry.

Q: Which of the following is NOT a common type of driving force? A. Reductions in uncertainty and business risk B. Changing societal concerns, attitudes, and lifestyles C. Diffusion of technical know-how across companies and countries D. Increasing efforts to collaborate closely with suppliers E. Advances in technology and manufacturing process innovation

Q: Which of the following is MOST likely to qualify as a driving force? A. Increases in price-cutting by rival sellers and the launch of major new advertising campaigns by one or more rivals B. Successful introduction of innovative new products or new ways to market products C. An increase in the prices of substitute products D. Decisions on the part of industry's three biggest competitors not to pursue a strategy of striving to be the industry's low-cost leader E. Decisions by one or more outsiders not to attempt to enter the industry

Q: Which of the following does NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions? A. Changes in who buys the product and how they use it, and changes in the long-term industry growth rate B. Changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency C. Changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration D. Changes in buyer preferences for differentiated products instead of mostly standardized or identical products E. Changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities

Q: Which of the following is most UNLIKELY to qualify as driving forces? A. Changes in the long-term industry growth rate, the entry or exit of major firms, and changes in cost and efficiency B. Increasing globalization of the industry and product innovation C. New Internet technology applications, new government regulations, and significant changes in government policy toward the industry D. Increasing efforts to collaborate with suppliers via strategic alliances and partnerships, escalating risk levels and normalization of cost and efficiency in the industry E. Marketing innovations and changes in who buys the industry's product and how they use it

Q: Which of the following is NOT generally a "driving force" capable of producing fundamental changes in industry and competitive conditions? A. Changes in the long-term industry growth rate B. Increasing globalization of the industry C. Product innovation and technological change D. Movement in the economy and in interest rates E. Regulatory influences and government policy changes

Q: One of the steps of driving-forces analysis is to identify which:A. strategy changes a company may need to make to prepare for the impacts of the driving forces.B. strategic group is the most powerful.C. industry member is likely to become (or remain) the industry leader and why.D. key success factors are most likely to help their company gain a competitive advantage.E. of the five competitive forces will be the strongest driver of industry change.

Q: The task of driving-forces analysis is to: A. develop a comprehensive list of all the potential causes of changing industry conditions. B. predict which new driving forces will emerge next. C. determine which of the five competitive forces is the biggest driver of industry change. D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces. E. learn what the industry key success factors are and how they might change in the future.

Q: Industry conditions change because of: A. such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers. B. newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups. C. newly emerging industry key success factors. D. important forces enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways. E. changes in the barriers to entry and the degree of competition from substitute products.

Q: The "driving forces" in an industry:A. are usually triggered by changing technology or stronger learning/experience curve effects.B. usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers.C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.D. appear when an industry begins to mature but are seldom present during early stages of the industry life cycle.E. are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

Q: A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can: A. pursue avenues that expose the firm to as many of the different competitive pressures as possible. B. shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces. C. pursue ways to identify and complement the five forces contradictions and inferences to attract competitive growth opportunities. D. pursue avenues that promote strategic thinking about how to contest competitor strengths and weaknesses and to create a checklist of potential profitability preferences. E. shift societal concerns, attitudes, and lifestyles by altering the pattern of competition.

Q: As a rule, the collective impact of competitive pressures associated with the five competitive forces: A. determines the strength of the industry's driving forces. B. determines the extent of the competitive pressure on industry profitability. C. means that fewer companies can achieve a competitive advantage via anything other than being the industry's low-cost leader. D. means there will be a larger number of competitive advantage opportunities for industry members. E. means there will be a greater number of industry key success factors.

Q: A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers:A. is competitively unattractive from the standpoint of earning good profits.B. offers little ability to build a sustainable competitive advantage.C. is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand.D. offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage.E. requires that industry members have a strongly differentiated product offering in order to be profitable.

Q: A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers: A. lacks powerful driving forces. B. gives each industry competitor the best potential for building sustainable competitive advantage over rival firms. C. makes it challenging for industry members to compete successfully unless they can strongly differentiate their products. D. is conducive to industry members earning attractive profits. E. requires that industry members have low costs in order to be competitively successful.

Q: Not all buyers of an industry's product have equal degrees of bargaining power with sellers, because: A. sellers in an industry provide similar products and generally their cost structures are different because of competitive advantages in their operation. B. some sellers may be less sensitive than others to price, quality, or service differences. C. along the various stages of the value chain sellers are conducive to earning attractive profits. D. the industry is a highly cohesive structure with limited fragmentation and few industry members. E. sellers are large and few in number relative to the number of buyers.

Q: Which of the following factors is NOT a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak? A. Whether certain customers offer sellers important market exposure or prestige B. Whether customers are relatively well-informed about sellers' products, prices, and costs C. Whether buyer needs and expectations are changing rapidly or slowly D. Whether sellers' products are highly differentiated, making it troublesome or costly for buyers to switch to competing brands or to substitute products E. Whether buyers pose a major threat to integrate backward into the product market of sellers

Q: Ali is a business unit head of a soap manufacturing company. Explain the strategy he could use to strengthen his market position and build a competitive advantage over his rivals. Differentiate between his strategy and a corporate strategy.

Q: List and briefly discuss at least three obligations of a company's board of directors in corporate governance and the strategy-making, strategy-executing process.

Q: What are the duties of a company's board of directors in the strategy-making, strategy-executing process?

Q: Identify and explain four actions that top executives can take that are key elements in directing organizational action and building capabilities behind the drive for good strategy execution to meet or beat performance targets.

Q: Identify and explain three actions that top executives can take to help instill a spirit of high achievement into the corporate culture and mobilize organizational energy behind the drive for good strategy execution and operating excellence.

Q: An organization's strategic plan consists of the actions which management plans to take in the near future. True or false? Explain and justify your answer.

Q: Discuss the meaning of each of the following levels of strategy and indicate what level of management tends to take the lead responsibility for crafting the strategy at each of the four levels. a. corporate strategy b. business strategy c. functional-area strategy d. operating strategy

Q: What is the strategy-making hierarchy for a diversified company? How does it differ from the strategy-making hierarchy for a single business company?

Q: Explain why a company's strategy is really a collection of strategies.

Q: The task of crafting a company's strategy is typically a job for the company's whole management team, not just a small group of senior executives. True or false? Explain and support your answer.

Q: What is the role and responsibility of a company's CEO in the strategy-making, strategy-executing process?

Q: Which is more important to a company's future financial performancethe achievement of strategic objectives or the achievement of financial objectives? Why?

Q: What is the meaning of the term "balanced scorecard"? What are the merits of using a balanced scorecard in judging a company's performance?

Q: The achievement of financial objectives tends to be a lagging indicator of a company's performance, while the achievement of strategic objectives tends to be a leading indicator of a company's future financial performance. True or false? Support and explain your answer.

Q: Isabelle is in the process of setting financial and strategic objectives for her marketing company. She realizes she needs to add short-term and longer-term performance targets. Is it important to include short-term and long-term objectives at this stage? Which one is more important? Explain.

Q: Explain the difference between financial objectives and strategic objectives. Give examples of each.

Q: Why does an organization need both financial and strategic objectives?

Q: What is meant by the term "stretch objectives"? Is it important that companies establish stretch objectives? Why or why not?

Q: Identify the key characteristics of a well-stated organizational objective.