MAN 4720 LATEST 2026/2027 EXAM QUESTIONS AND
ANSWERS RATED A+
✔✔Cost Leader Strategy - ✔✔firms can earn above-average returns by producing at
costs below competitors
✔✔Differentiation Strategy - ✔✔firms can earn above-average returns by producing
differetiated goods or services that customers are willing to pay a price premium
✔✔Capability - ✔✔the capacity for a set of resources to perform a task or an activity in
an integrative manner
✔✔Global Economy (8) - ✔✔One in which goods, services, people, skills, and ideas
move freely across geographic borders
✔✔Mission (19) - ✔✔specifies the businesses in which the firm intends to compete and
the customers it intends to serve
✔✔Organizational Culture (25) - ✔✔refers to the complex set of ideologies, symbols,
and core values that are shared throughout the firm and that influence how the firm
conducts business
✔✔Resources (16) - ✔✔inputs inputs into a firm's production process, such as capital
equipment, the skills of individual employees, patents, finances, and talented managers
✔✔The external environment consists of the - ✔✔1) general environment
2) industry environment
3) competitor environment
✔✔General Environment - ✔✔-part of the external environment
-focused on the future
✔✔Industry Environment - ✔✔-part of the external environment
-focused on factors and conditions influencing a firm's profitability within an industry
✔✔Competitor Environment - ✔✔-part of the external environment
-focused on predicting the dynamics of competitors' actions, responses and intentions
✔✔Segments and elements of the general (macro) environment - ✔✔-demographic
-economic
-political/legal
-sociocultural
-technological
-global
, -physical
✔✔Parts of the external environment - ✔✔-scanning
-monitoring
-forecasting
-assessing
✔✔External environment analysis enables firms to identify - ✔✔opportunities and
threats
✔✔The Five Forces of Competition Model - ✔✔
✔✔Economies of Scale - ✔✔-marginal improvements in efficiency that a firm
experiences as it incrementally increases its size
✔✔Factors (advantages and disadvantages) related to large and small-scale entry
include - ✔✔-flexibility in pricing and market share
-costs related to scale economies
-competitor retaliation
✔✔Barriers to entry - ✔✔-product differentiation
-capital requirements
-switching costs
-distribution channel access
-cost disadvantages independent of scale
-government policy
-expected retaliation
✔✔Supplier bargaining power increases when - ✔✔-suppliers are large and few in
number
-suitable substitute products are not available
-individual buyers are not large customers of suppliers and there are many of them
-suppliers' goods are critical to the buyers' marketplace success
-suppliers' products create high switching costs
-suppliers pose a threat to integrate forward into buyers' industry
✔✔Buyer bargaining power increases when - ✔✔-buyers are large and few in number
-buyers purchase a large portion of an industry's total output
-buyers' purchases are a significant portion of a supplier's annual revenues
-buyer's switching costs are low
-buyers can pose threat to integrate backward into the sellers' industry
✔✔The threat of substitute products increases when - ✔✔-buyers face few switching
costs
-the substitute product's price is lower
ANSWERS RATED A+
✔✔Cost Leader Strategy - ✔✔firms can earn above-average returns by producing at
costs below competitors
✔✔Differentiation Strategy - ✔✔firms can earn above-average returns by producing
differetiated goods or services that customers are willing to pay a price premium
✔✔Capability - ✔✔the capacity for a set of resources to perform a task or an activity in
an integrative manner
✔✔Global Economy (8) - ✔✔One in which goods, services, people, skills, and ideas
move freely across geographic borders
✔✔Mission (19) - ✔✔specifies the businesses in which the firm intends to compete and
the customers it intends to serve
✔✔Organizational Culture (25) - ✔✔refers to the complex set of ideologies, symbols,
and core values that are shared throughout the firm and that influence how the firm
conducts business
✔✔Resources (16) - ✔✔inputs inputs into a firm's production process, such as capital
equipment, the skills of individual employees, patents, finances, and talented managers
✔✔The external environment consists of the - ✔✔1) general environment
2) industry environment
3) competitor environment
✔✔General Environment - ✔✔-part of the external environment
-focused on the future
✔✔Industry Environment - ✔✔-part of the external environment
-focused on factors and conditions influencing a firm's profitability within an industry
✔✔Competitor Environment - ✔✔-part of the external environment
-focused on predicting the dynamics of competitors' actions, responses and intentions
✔✔Segments and elements of the general (macro) environment - ✔✔-demographic
-economic
-political/legal
-sociocultural
-technological
-global
, -physical
✔✔Parts of the external environment - ✔✔-scanning
-monitoring
-forecasting
-assessing
✔✔External environment analysis enables firms to identify - ✔✔opportunities and
threats
✔✔The Five Forces of Competition Model - ✔✔
✔✔Economies of Scale - ✔✔-marginal improvements in efficiency that a firm
experiences as it incrementally increases its size
✔✔Factors (advantages and disadvantages) related to large and small-scale entry
include - ✔✔-flexibility in pricing and market share
-costs related to scale economies
-competitor retaliation
✔✔Barriers to entry - ✔✔-product differentiation
-capital requirements
-switching costs
-distribution channel access
-cost disadvantages independent of scale
-government policy
-expected retaliation
✔✔Supplier bargaining power increases when - ✔✔-suppliers are large and few in
number
-suitable substitute products are not available
-individual buyers are not large customers of suppliers and there are many of them
-suppliers' goods are critical to the buyers' marketplace success
-suppliers' products create high switching costs
-suppliers pose a threat to integrate forward into buyers' industry
✔✔Buyer bargaining power increases when - ✔✔-buyers are large and few in number
-buyers purchase a large portion of an industry's total output
-buyers' purchases are a significant portion of a supplier's annual revenues
-buyer's switching costs are low
-buyers can pose threat to integrate backward into the sellers' industry
✔✔The threat of substitute products increases when - ✔✔-buyers face few switching
costs
-the substitute product's price is lower
