MBA 620 CERTIFICATION EVALUATION 2026
FULL QUESTIONS WITH SOLUTIONS
◉ What is the best predictor of potential company profitability.
Answer: ROE, profitability varies across industries
◉ What does Industry Analysis help us determine. Answer: Industry
Attractiveness (Profit Potential)
Key Success Factors
Driving Forces
◉ Defining an Industry. Answer: Narrow Boundaries: use similar
inputs and produce similar outputs
Broader Boundaries: acknowledge wider competitive substitutes,
different KSFs and industry dynamics, often a more realistic
competitive set
Use NAICS Code Classifications
◉ Herfindahl Index - HHI. Answer: calculating concentration ratios,
determine if it is an attractive industry and what the key success
factors are
,◉ Keys Success Factors. Answer: 4-6 factors, what each company
must make strategic investments in to succeed in the industry,
measure by comparing across competitors, used in strategic maps
◉ Parable of Yahoo Article. Answer: • Yahoo is no longer an
independent company due to failure
• Started in 1994 as peoples first encounter with the internet
• Peak success in 2012
• Verizon acquired the company
• Problems: lack of focus determining what area to specialize , deal
making in passing up many good opportunities, founders too
attached to their product to make the right strategic decision
• Message: vision and mission align the organization, what we are
about as a company
• Economies of Scale: low unit costs from producing on a large scale
• Competitive advantage = market share
◉ The Five Competitive Forces that Shape Strategy Article. Answer: •
Helps a company understand its industry and find a position where
they can be more profitable and less vulnerable to competitors
• Five competitive forces: what influences profitability in your
industry and competition
o Threat of Entry: affects prices and costs
, o Power of Suppliers: suppliers have power when more
concentrated than the industry it sells to, no substitutes, threaten to
forward integration
o Power of Buyers: have power when few buyers for single vendor,
undifferentiated products, produce product themselves by backward
integration, price sensitive when product cost is low
o Threat of Substitutes: high means industry profitability suffers
o Rivalry: price discounting, new products, advertising campaigns,
service improvements, greatest rivalry when many competitors,
slow growth, high exit barriers, firms not familiar with one another
◉ What are the two types of internal analysis and the differences
between them?. Answer: SWOT: what a company is, static snapshot,
strategic planning exercise, easy to use and understand, identify
alignment/misalignment, overall direction, strategic competitive
comparison
Cons: laundry list of items, descriptions can over-simplify,
definitions vary over time, unclear if strengths are relevant to KSFs,
static view at only one point in time
Value Chain: what a company does, dynamic view, set of activities to
form successful business system, create patterns of behaviors,
◉ Support vs Primary Activities. Answer: Support: people
performing their job, Finance, Legal, HR, R&D, Procurement
Primary: activities make the products, inputs, operations,
distribution, marketing and sales, service
FULL QUESTIONS WITH SOLUTIONS
◉ What is the best predictor of potential company profitability.
Answer: ROE, profitability varies across industries
◉ What does Industry Analysis help us determine. Answer: Industry
Attractiveness (Profit Potential)
Key Success Factors
Driving Forces
◉ Defining an Industry. Answer: Narrow Boundaries: use similar
inputs and produce similar outputs
Broader Boundaries: acknowledge wider competitive substitutes,
different KSFs and industry dynamics, often a more realistic
competitive set
Use NAICS Code Classifications
◉ Herfindahl Index - HHI. Answer: calculating concentration ratios,
determine if it is an attractive industry and what the key success
factors are
,◉ Keys Success Factors. Answer: 4-6 factors, what each company
must make strategic investments in to succeed in the industry,
measure by comparing across competitors, used in strategic maps
◉ Parable of Yahoo Article. Answer: • Yahoo is no longer an
independent company due to failure
• Started in 1994 as peoples first encounter with the internet
• Peak success in 2012
• Verizon acquired the company
• Problems: lack of focus determining what area to specialize , deal
making in passing up many good opportunities, founders too
attached to their product to make the right strategic decision
• Message: vision and mission align the organization, what we are
about as a company
• Economies of Scale: low unit costs from producing on a large scale
• Competitive advantage = market share
◉ The Five Competitive Forces that Shape Strategy Article. Answer: •
Helps a company understand its industry and find a position where
they can be more profitable and less vulnerable to competitors
• Five competitive forces: what influences profitability in your
industry and competition
o Threat of Entry: affects prices and costs
, o Power of Suppliers: suppliers have power when more
concentrated than the industry it sells to, no substitutes, threaten to
forward integration
o Power of Buyers: have power when few buyers for single vendor,
undifferentiated products, produce product themselves by backward
integration, price sensitive when product cost is low
o Threat of Substitutes: high means industry profitability suffers
o Rivalry: price discounting, new products, advertising campaigns,
service improvements, greatest rivalry when many competitors,
slow growth, high exit barriers, firms not familiar with one another
◉ What are the two types of internal analysis and the differences
between them?. Answer: SWOT: what a company is, static snapshot,
strategic planning exercise, easy to use and understand, identify
alignment/misalignment, overall direction, strategic competitive
comparison
Cons: laundry list of items, descriptions can over-simplify,
definitions vary over time, unclear if strengths are relevant to KSFs,
static view at only one point in time
Value Chain: what a company does, dynamic view, set of activities to
form successful business system, create patterns of behaviors,
◉ Support vs Primary Activities. Answer: Support: people
performing their job, Finance, Legal, HR, R&D, Procurement
Primary: activities make the products, inputs, operations,
distribution, marketing and sales, service
