MGT 499 - MIDTERM COMPREHENSIVE EXAM QUESTIONS
WITH DETAILED VERIFIED AND 100% ACCURATE
ANSWERS BRAND NEW EXAM ALREADY GRADED (A+
PASS)
external environment Ans✓✓✓ general environment → industry
environment → strategic groups → the firm
external influences Ans✓✓✓ - external environment
- stakeholders
strategic groups Ans✓✓✓ cluster of firms that share similar strategies
EX. Ferrari, Lamborghini, Porsche
EX. Gucci, Chanel, Fendi
EX. Burger King, Wendy's, McDonald's
strategic groups as an analytical tool Ans✓✓✓ - Identify barriers to
mobility that protect a group from attacks
by other groups
- Identify groups whose competitive position may be marginal or
tenuous
- Chart the future direction of firms' strategies
- Thinking through the implications of each industry trend for the
strategic group as a whole
,industry (competitive) environment Ans✓✓✓ - For companies outside
the industry,
• Is the industry attractive to enter?
- For companies within the industry,
• Position the company where competitive forces are weakest.
• Change the industry structure to reduce the intensity of competitive
forces.
industry Ans✓✓✓ a set of firms that produce similar products or
services, sell to similar customers, and use similar methods of
production
industry analysis Ans✓✓✓ to understand the underpinnings of
competition and the root causes of profitability
Firms make profit by... Ans✓✓✓ adapting their strategies to industry
conditions in order to:
- outcompete competitors within the industry and outside of the industry
(substitutes and potential entrants)
- lock in customers
Five Forces Analysis Ans✓✓✓ 1. threat of new entrants
2. bargaining power of buyers
3. bargaining power of suppliers
,4. threat of substitute products or services
5. rivalry among existing firms
How does each of these forces influence an industry's
profitability? Ans✓✓✓ - Strong competitive pressure from each force
→ low industry profitability
- Analysis is from the industry perspective, not from the perspective of a
particular firm
threat of new entrants Ans✓✓✓ High entry barriers lead to a low threat
of new entries:
- Economies of scale [cost advantage]
- Product differentiation [perception of uniqueness]
- Switching costs [customer loyalty program]
- Capital requirements
- Incumbent's control of (1) knowledge, (2) raw materials, (3)
distribution channels
bargaining power of buyers Ans✓✓✓ Buyers are powerful when:
- Number of buyers is small
- Purchase large quantities
- Products are standard/undifferentiated
- Can switch to another product at little cost
- Product is unimportant
, - Buyers can integrate backward into the seller's industry
- Buyers are not earning significant profits
bargaining power of suppliers Ans✓✓✓ Suppliers are powerful when:
- Only a few suppliers exist
- Their products are differentiated or they have built up switching costs
for the buyer
- Their product is an important input to the buyer's business
- The industry is not an important customer of the suppliers
threat of substitute products or services Ans✓✓✓ Substitute are a threat
if:
- Product has attractive price-performance compared to the industry's
products
- Switching costs are low
EX. water vs. fruit juices vs. soda vs. milk vs. sports energy drinks vs.
coffee/tea
rivalry among existing firms Ans✓✓✓ High rivalry comes from:
- Numerous or equally balanced competitors
- Homogeneous products (lack of differentiation)
- High fixed costs
- High exit barriers (specialized assets)
WITH DETAILED VERIFIED AND 100% ACCURATE
ANSWERS BRAND NEW EXAM ALREADY GRADED (A+
PASS)
external environment Ans✓✓✓ general environment → industry
environment → strategic groups → the firm
external influences Ans✓✓✓ - external environment
- stakeholders
strategic groups Ans✓✓✓ cluster of firms that share similar strategies
EX. Ferrari, Lamborghini, Porsche
EX. Gucci, Chanel, Fendi
EX. Burger King, Wendy's, McDonald's
strategic groups as an analytical tool Ans✓✓✓ - Identify barriers to
mobility that protect a group from attacks
by other groups
- Identify groups whose competitive position may be marginal or
tenuous
- Chart the future direction of firms' strategies
- Thinking through the implications of each industry trend for the
strategic group as a whole
,industry (competitive) environment Ans✓✓✓ - For companies outside
the industry,
• Is the industry attractive to enter?
- For companies within the industry,
• Position the company where competitive forces are weakest.
• Change the industry structure to reduce the intensity of competitive
forces.
industry Ans✓✓✓ a set of firms that produce similar products or
services, sell to similar customers, and use similar methods of
production
industry analysis Ans✓✓✓ to understand the underpinnings of
competition and the root causes of profitability
Firms make profit by... Ans✓✓✓ adapting their strategies to industry
conditions in order to:
- outcompete competitors within the industry and outside of the industry
(substitutes and potential entrants)
- lock in customers
Five Forces Analysis Ans✓✓✓ 1. threat of new entrants
2. bargaining power of buyers
3. bargaining power of suppliers
,4. threat of substitute products or services
5. rivalry among existing firms
How does each of these forces influence an industry's
profitability? Ans✓✓✓ - Strong competitive pressure from each force
→ low industry profitability
- Analysis is from the industry perspective, not from the perspective of a
particular firm
threat of new entrants Ans✓✓✓ High entry barriers lead to a low threat
of new entries:
- Economies of scale [cost advantage]
- Product differentiation [perception of uniqueness]
- Switching costs [customer loyalty program]
- Capital requirements
- Incumbent's control of (1) knowledge, (2) raw materials, (3)
distribution channels
bargaining power of buyers Ans✓✓✓ Buyers are powerful when:
- Number of buyers is small
- Purchase large quantities
- Products are standard/undifferentiated
- Can switch to another product at little cost
- Product is unimportant
, - Buyers can integrate backward into the seller's industry
- Buyers are not earning significant profits
bargaining power of suppliers Ans✓✓✓ Suppliers are powerful when:
- Only a few suppliers exist
- Their products are differentiated or they have built up switching costs
for the buyer
- Their product is an important input to the buyer's business
- The industry is not an important customer of the suppliers
threat of substitute products or services Ans✓✓✓ Substitute are a threat
if:
- Product has attractive price-performance compared to the industry's
products
- Switching costs are low
EX. water vs. fruit juices vs. soda vs. milk vs. sports energy drinks vs.
coffee/tea
rivalry among existing firms Ans✓✓✓ High rivalry comes from:
- Numerous or equally balanced competitors
- Homogeneous products (lack of differentiation)
- High fixed costs
- High exit barriers (specialized assets)
