1
AGEC 440 Questions with Answers (100% Correct
Answers)
S-C-P approach traditionally employed to _______ attainment of
________ market conditions Answer: Facilitate;Competitive
aimed to develop competitive markets Answer: Anti-trust
Turns S-C-P framework "upside down"
- It seeks ways to describes attributes of industry that make it less than
competitive
- To help firms find ways to make above normal economic profits
Answer: Business Approach to SCP: Strategy Approach
The essence of strategy relates to seeking _______ normal economic
returns. Answer: Above
What is porters 5 forces? Answer: Based on S-C-P framework to assess
environmental threats or competitive market conditions.
any organization external to a firm that reduces the level of that firm's
performance Answer: Environmental Threats
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,2
Purpose of 5 forces? Answer: Assist firm manager's a framework to
analyze environmental threats
To develop strategies to neutralize threats so as to seek competitive
advantage
Competitive advantage yields ______ normal economic returns
Answer: above
Environmental Threats: Porter's 5 Forces: Answer: Threat of Entry
Threat of Rivalry
Threat of Substitutes
Threat of Suppliers
Threat of Buyers
List of remote environment trends: Answer: SOCIOCULTURAL
TRENDS
TECHNOLOGICAL TRENDS
GOVERNMENT/REGULATORY TRENDS
ECONOMIC TRENDS
© 2025 All rights reserved
,3
INDUSTRY ANALYSIS BASED ON INDUSTRIAL ORGANIZATION
ECONOMICS Answer: Task environment
New entrants motivated to enter and compete due to above normal
economic profits earned by existing firms
- Increases industry competition
- Reduced performance of incumbent firms
• With free entrance, performance tends to competitive levels Answer:
Threat of Entry
cost of entry by new firms
- High cost detours entry
- Determines sustainability of above normal economic profits
- Protects incumbent firm's profits Answer: Barriers To Entry
Factors affecting threat of entry: Answer: economies of scale
capital requirements
access to distribution
© 2025 All rights reserved
, 4
Product differentiation / brand identity
natural cost advantages
learning curve
access to necessary inputs
government policy
- High cost of fixed investment
- Fixed demand and high market share of incumbents forces entrance
at sub-optimal scale
Higher cost to new entrant Answer: Economies of Scale
- Incumbents have brand identity and customer loyalty
• New entrants face higher advertising costs to change consumer
behavior
• e.g. U.S. Brewing Industry (Budweiser) Answer: Product
Differentiation
• Rivalry is the intensity of competition among a firm's direct
competitors
© 2025 All rights reserved
AGEC 440 Questions with Answers (100% Correct
Answers)
S-C-P approach traditionally employed to _______ attainment of
________ market conditions Answer: Facilitate;Competitive
aimed to develop competitive markets Answer: Anti-trust
Turns S-C-P framework "upside down"
- It seeks ways to describes attributes of industry that make it less than
competitive
- To help firms find ways to make above normal economic profits
Answer: Business Approach to SCP: Strategy Approach
The essence of strategy relates to seeking _______ normal economic
returns. Answer: Above
What is porters 5 forces? Answer: Based on S-C-P framework to assess
environmental threats or competitive market conditions.
any organization external to a firm that reduces the level of that firm's
performance Answer: Environmental Threats
© 2025 All rights reserved
,2
Purpose of 5 forces? Answer: Assist firm manager's a framework to
analyze environmental threats
To develop strategies to neutralize threats so as to seek competitive
advantage
Competitive advantage yields ______ normal economic returns
Answer: above
Environmental Threats: Porter's 5 Forces: Answer: Threat of Entry
Threat of Rivalry
Threat of Substitutes
Threat of Suppliers
Threat of Buyers
List of remote environment trends: Answer: SOCIOCULTURAL
TRENDS
TECHNOLOGICAL TRENDS
GOVERNMENT/REGULATORY TRENDS
ECONOMIC TRENDS
© 2025 All rights reserved
,3
INDUSTRY ANALYSIS BASED ON INDUSTRIAL ORGANIZATION
ECONOMICS Answer: Task environment
New entrants motivated to enter and compete due to above normal
economic profits earned by existing firms
- Increases industry competition
- Reduced performance of incumbent firms
• With free entrance, performance tends to competitive levels Answer:
Threat of Entry
cost of entry by new firms
- High cost detours entry
- Determines sustainability of above normal economic profits
- Protects incumbent firm's profits Answer: Barriers To Entry
Factors affecting threat of entry: Answer: economies of scale
capital requirements
access to distribution
© 2025 All rights reserved
, 4
Product differentiation / brand identity
natural cost advantages
learning curve
access to necessary inputs
government policy
- High cost of fixed investment
- Fixed demand and high market share of incumbents forces entrance
at sub-optimal scale
Higher cost to new entrant Answer: Economies of Scale
- Incumbents have brand identity and customer loyalty
• New entrants face higher advertising costs to change consumer
behavior
• e.g. U.S. Brewing Industry (Budweiser) Answer: Product
Differentiation
• Rivalry is the intensity of competition among a firm's direct
competitors
© 2025 All rights reserved
