Strategy 290 Quiz #3 Question and
answers rated A+ 2025/2026
What is the empirical goal of an industry analysis? - correct answer ✔to systematically explain
observed variance in industry profitability
Importance of industry analysis - correct answer ✔drives competition and the level of industry
profitability
evaluates current and future industry attractiveness
to understand differences in profitability by position in the industry system
identify opportunities
Identifiable opportunities in an industry system - correct answer ✔- to change industry structure
- to introduce new products
- for entry
Analyzing Industry Structure: Five Forces Model
What is the key to using the framework? - correct answer ✔To know whose projective
incumbent/entrant/supplier/buyer we are taking when analyzing the industry structure.
What is the goal of this framework? - correct answer ✔The goal is to evaluate the potential for profit
(the attractiveness of the industry) and to understand the underlying constraints
, A supplier group to an industry will be powerful when: - correct answer ✔- The suppliers product is an
important input to the industry incumbents
- The supplier group does not depend heavily on the industry being analyzed
- The supplier group has built up switching costs for the industry incumbents
- The supplier group poses a credible threat of forward integration
- The supplier group is dominated by a few companies and is more concentrated than the industry it
sells to
- The supplier group's products are differentiated or cannot be easily substituted
Suppliers can... - correct answer ✔exert power by threatening to raise prices or reduce the quality
(think of quality holistically) of purchased goods and services
Analyze Supplier Power by examining: - correct answer ✔- buyer's (industry incumbents) price
sensitivity
- relative bargaining power
- buyer (industry incumbents) and supplier switching costs
switching cost: if you were locked in one supplier
price sensitivity: example is Microsoft can raise price of windows and suppliers will still buy
Buyer Power threaten an industry by: - correct answer ✔- forcing down prices
- bargaining for higher quality or more services
- playing competitors against each other
Analyze Buyer Power by examining - correct answer ✔- buyer's price sensitivity
- relative bargaining power
- buyer's switching costs
answers rated A+ 2025/2026
What is the empirical goal of an industry analysis? - correct answer ✔to systematically explain
observed variance in industry profitability
Importance of industry analysis - correct answer ✔drives competition and the level of industry
profitability
evaluates current and future industry attractiveness
to understand differences in profitability by position in the industry system
identify opportunities
Identifiable opportunities in an industry system - correct answer ✔- to change industry structure
- to introduce new products
- for entry
Analyzing Industry Structure: Five Forces Model
What is the key to using the framework? - correct answer ✔To know whose projective
incumbent/entrant/supplier/buyer we are taking when analyzing the industry structure.
What is the goal of this framework? - correct answer ✔The goal is to evaluate the potential for profit
(the attractiveness of the industry) and to understand the underlying constraints
, A supplier group to an industry will be powerful when: - correct answer ✔- The suppliers product is an
important input to the industry incumbents
- The supplier group does not depend heavily on the industry being analyzed
- The supplier group has built up switching costs for the industry incumbents
- The supplier group poses a credible threat of forward integration
- The supplier group is dominated by a few companies and is more concentrated than the industry it
sells to
- The supplier group's products are differentiated or cannot be easily substituted
Suppliers can... - correct answer ✔exert power by threatening to raise prices or reduce the quality
(think of quality holistically) of purchased goods and services
Analyze Supplier Power by examining: - correct answer ✔- buyer's (industry incumbents) price
sensitivity
- relative bargaining power
- buyer (industry incumbents) and supplier switching costs
switching cost: if you were locked in one supplier
price sensitivity: example is Microsoft can raise price of windows and suppliers will still buy
Buyer Power threaten an industry by: - correct answer ✔- forcing down prices
- bargaining for higher quality or more services
- playing competitors against each other
Analyze Buyer Power by examining - correct answer ✔- buyer's price sensitivity
- relative bargaining power
- buyer's switching costs
