Industry and Competitive Analysis
practice test
Purpose of analysing an industry - correct answers- Improve forecasts
- Identify investment opportunties
Industry and Competitive Analysis Steps - correct answers1) Define Industry
2) Conduct industry survey
3) Establish industry structure via Porter's 5 Forces
4) Determine external influence of industry via PESTLE analysis
5)
Over the long run:
A: business cycles result in profitability differences by industry.
B: company-specific factors such as competitive strategy result in profitability differences by industry.
C: structural factors result in profitability differences by industry. - correct answersC is correct.
Structural factors, such as Porter's Five Forces, drive profitability and profitability differences by industry
in the long run.
Company-specific factors result in company profitability levels around the industry median, while
changes in the business cycle drive short-run profitability for both industries and companies.
Which of the following is an industry, not a company-specific, attribute?
A: Competitive strategy
B: Business model variation
C: Sensitivity to the business cycle - correct answersC is correct.
Sensitivity to the business cycle is an example of a factor that influences an entire industry.
Herfindahl-Hirschman Index - correct answersA measure of market concentration, calculated as the sum
of the squares of competitor market shares.
Porter's 5 Forces - correct answers*Rivalry among competitors;
*Threat of new entrants;
*Threat of substitute products;
*Bargaining power of buyers;
*Bargaining power of suppliers;
An alternative method of grouping companies by geography is least likely to be completed using:
A: location of head office.
B: geographic composition of revenue.
C: primary listing of its equity securities. - correct answersB is correct.
practice test
Purpose of analysing an industry - correct answers- Improve forecasts
- Identify investment opportunties
Industry and Competitive Analysis Steps - correct answers1) Define Industry
2) Conduct industry survey
3) Establish industry structure via Porter's 5 Forces
4) Determine external influence of industry via PESTLE analysis
5)
Over the long run:
A: business cycles result in profitability differences by industry.
B: company-specific factors such as competitive strategy result in profitability differences by industry.
C: structural factors result in profitability differences by industry. - correct answersC is correct.
Structural factors, such as Porter's Five Forces, drive profitability and profitability differences by industry
in the long run.
Company-specific factors result in company profitability levels around the industry median, while
changes in the business cycle drive short-run profitability for both industries and companies.
Which of the following is an industry, not a company-specific, attribute?
A: Competitive strategy
B: Business model variation
C: Sensitivity to the business cycle - correct answersC is correct.
Sensitivity to the business cycle is an example of a factor that influences an entire industry.
Herfindahl-Hirschman Index - correct answersA measure of market concentration, calculated as the sum
of the squares of competitor market shares.
Porter's 5 Forces - correct answers*Rivalry among competitors;
*Threat of new entrants;
*Threat of substitute products;
*Bargaining power of buyers;
*Bargaining power of suppliers;
An alternative method of grouping companies by geography is least likely to be completed using:
A: location of head office.
B: geographic composition of revenue.
C: primary listing of its equity securities. - correct answersB is correct.
