Business-level strategy

Question 1

Definition : industry

Answer 1

An industry is a group of firms producing products and/or services that are close substitutes.

Question 2

donner les 5 dimensions du Porter’s five-forces framework

Answer 2

• Internal rivalry
• threat of new entrants
• threat of substitute products
• bargaining power of supplier
• bargaining power of buyers

Question 3

Which factors can increase price competition?

Answer 3

• Many sellers
• Declining or stagnant industry
• Excess in capacity
• Products are undifferentiated/Buyers have low switching costs
• Strong exit barriers

Question 4

give the Entry barriers ( :Threat of new entrants)

Answer 4

• Network externalities
• Experience curve
• Restricted access to key inputs and resources
• Reputation: cust’ are brand loyal
• Expectations about retaliation and post-entry competition

Question 5

Definition: substitute

Answer 5

Substitutes are goods and services from another industry that serve the same consumer needs (e.g. letters and emails, train, car, aircraft)

Question 6

Upstream industry = …

Answer 6

suppliers

Question 7

Downstream industry = …

Answer 7

buyers

Question 8

What are the determinants of supplier power?

Answer 8

• (High) Concentration of upstream industry in relation to the industry in question
• Availability of substitute inputs
• purchase Volume of downstream firms
• relation-specific Investments
• threat of forward Integration by supplier

Question 9

Buyers have high bargaining power if…

Answer 9

• products have close Substitutes
• purchase Volume is high
• Concentration in the downstream industry is high in relation to the industry in question
• more Relationship-specific investments by firms than by the buyers
• threat of Backward integration

Question 10

Explain the SSNIP criterion

Answer 10

competitors are identified, if a merger among them would lead to a Small but Significant Nontransitory Increase
in Price

Question 11

What are the 3 strategies a firm can adopt within a market? + def for each strategy

Answer 11

• cost leadership strategy (integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest costs, relative to that of competitors)
• differentiation strategy (set of actions taken to produce
  goods or services that customers perceive as being
  different in ways that are important for them)
• focus strategy (integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment)

Question 12

Give the 3 kinds of market segmentation (Focus strategy)

Answer 12

• Particular buyer group (e.g. youths or senior citizens)
• Specific geographical market
• Different segment of a product line

Question 13

Economies of scope + expliquer la dernière caractéristique

Answer 13

Underutilized : Physical asset, Knowledge, and Reputation –> Umbrella branding = advertisements for one product of a firm may encourage customers to consider other products made by the same firm

Question 14

Give 5 characteristics of a Vigilant leaders compared to ( / ) an operational one

Answer 14

• Focus: External, active and curious / Internal, narrow and focused
• Market Orientation: Outside-in / Inside-out
• Networking: Broad social and professional
  networks / Limits network to familiar
• Attitude toward uncertainty : Umbracing, Navigating / avoiding; controlling
• Time Horizon: Long-term / Short-term