MGT 8803 COMPREHENSIVE EXAM UPDATED QUESTIONS
AND SOLUTIONS GRADED A+
✔✔PESTEL: Ecological - ✔✔*carbon footprint
*global warming
*air & water pollution
*toxins in food & other products
*alternate energies
*society's changing views toward business responsibility
IMPACT: buyers' choice of procurement partners (sourcing & brand image), increased
govt regulation of operational & transportation process, employee engagement, can
create business opps
✔✔PESTEL: Legal - ✔✔*laws, mandates, regulations, court decisions
*hiring & promotion laws
*anti-trust laws
*environmental protection laws
*industry regulation & deregulation
*data security
*intellectual property
*ethical behavior
IMPACT: creates limitations in business marketing & operational practices, increased
operational costs, can create entrepreneurial opps for new & existing firms
✔✔SCP Model - ✔✔Structure - Conduct - Performance
✔✔SCP: Structure - ✔✔*number of competitors & product diversity
*value chain & extent of vertical integration
*economics of supply & demand
*cost of entry/exit
✔✔SCP: Conduct - ✔✔*branding, product differentiation, & price setting
*capacity
*innovation
*operating efficiencies
*collusion
✔✔SCP: Performance - ✔✔*profits
*value creation
*technological progress
*shareholder returns
*industry performance
✔✔Perfect Competition - ✔✔*many small firms
*firms are price takers
, *commodity product
*low entry barriers
*fragmented: low profitability
✔✔Monopolistic Competition - ✔✔*many firms
*some pricing power
*differentiated product
*medium entry barriers
Ex: fine dining restaurants, universities
✔✔Oligopoly - ✔✔*few (large) firms
*some pricing power
*differentiated product
*high entry barriers
Ex: soft drink, aircrafts, cell phones
✔✔Monopoly - ✔✔*one firm
*considerable pricing power
*unique product
*very high entry barriers
*consolidated: high profitability
Ex: Microsoft
✔✔Porter 5 Forces Model - ✔✔*based off SCP model
*focused on industry structure & how factors that drive structure impacts firm profitability
*assess attractiveness (profitability)
*stronger the force -> greater the negative impact
✔✔P5F: Threat of new entrants HIGH... - ✔✔*no or low barriers to entry (economies of
scale, network effects, low switching costs, low capital requirements, advantages
independent of size, govt policy, credible threat of retaliation)
*industry average profitability is high
✔✔P5F: Bargaining of Buyers is HIGH... - ✔✔*few buyers & each purchases large
quantities
*industry products are standardized or undifferentiated
*buyer has many substitute options
*buyers face low or no switching costs
*buyers are price-sensitive
*buyers can backwardly integrate into industry
✔✔P5F: Bargaining of Suppliers is HIGH... - ✔✔*concentrated/limited supplier industry
*suppliers not dependent on industry for majority of revenue
*industry competitor firms face supplier switching costs
*suppliers hold scarce resources
AND SOLUTIONS GRADED A+
✔✔PESTEL: Ecological - ✔✔*carbon footprint
*global warming
*air & water pollution
*toxins in food & other products
*alternate energies
*society's changing views toward business responsibility
IMPACT: buyers' choice of procurement partners (sourcing & brand image), increased
govt regulation of operational & transportation process, employee engagement, can
create business opps
✔✔PESTEL: Legal - ✔✔*laws, mandates, regulations, court decisions
*hiring & promotion laws
*anti-trust laws
*environmental protection laws
*industry regulation & deregulation
*data security
*intellectual property
*ethical behavior
IMPACT: creates limitations in business marketing & operational practices, increased
operational costs, can create entrepreneurial opps for new & existing firms
✔✔SCP Model - ✔✔Structure - Conduct - Performance
✔✔SCP: Structure - ✔✔*number of competitors & product diversity
*value chain & extent of vertical integration
*economics of supply & demand
*cost of entry/exit
✔✔SCP: Conduct - ✔✔*branding, product differentiation, & price setting
*capacity
*innovation
*operating efficiencies
*collusion
✔✔SCP: Performance - ✔✔*profits
*value creation
*technological progress
*shareholder returns
*industry performance
✔✔Perfect Competition - ✔✔*many small firms
*firms are price takers
, *commodity product
*low entry barriers
*fragmented: low profitability
✔✔Monopolistic Competition - ✔✔*many firms
*some pricing power
*differentiated product
*medium entry barriers
Ex: fine dining restaurants, universities
✔✔Oligopoly - ✔✔*few (large) firms
*some pricing power
*differentiated product
*high entry barriers
Ex: soft drink, aircrafts, cell phones
✔✔Monopoly - ✔✔*one firm
*considerable pricing power
*unique product
*very high entry barriers
*consolidated: high profitability
Ex: Microsoft
✔✔Porter 5 Forces Model - ✔✔*based off SCP model
*focused on industry structure & how factors that drive structure impacts firm profitability
*assess attractiveness (profitability)
*stronger the force -> greater the negative impact
✔✔P5F: Threat of new entrants HIGH... - ✔✔*no or low barriers to entry (economies of
scale, network effects, low switching costs, low capital requirements, advantages
independent of size, govt policy, credible threat of retaliation)
*industry average profitability is high
✔✔P5F: Bargaining of Buyers is HIGH... - ✔✔*few buyers & each purchases large
quantities
*industry products are standardized or undifferentiated
*buyer has many substitute options
*buyers face low or no switching costs
*buyers are price-sensitive
*buyers can backwardly integrate into industry
✔✔P5F: Bargaining of Suppliers is HIGH... - ✔✔*concentrated/limited supplier industry
*suppliers not dependent on industry for majority of revenue
*industry competitor firms face supplier switching costs
*suppliers hold scarce resources
