Chapter 2

Question 1

General environment uses 6 trends, namely:

Answer 1

• Demographic trends
• Economic climate
• Specific international events
• Technology change
• Cultural trends
• Legal and political conditions

Question 2

The Firm performance can be measured with…

Answer 2

the SCP Model

Question 3

The SCP Model exists of

Answer 3

Industry structure
#competitors
Homogenity of the products
Cost of entry and exist

Firm conduct
Ability to generate competitive advantage

Performance
Industry level
Firm level: gaining competitive advantage, parity or disadvantage
Industry level: Productive and allocative effiency, level of employment, progress.

Question 4

Enviromental treats exists of

Answer 4

1. Threat from new competitors
2. Threat from existing competitors
3. Threat from substitutes
4. Threat from leverage suppliers
5. Threat from buyers influence

Question 5

Threat from new competition

Answer 5

1. Governmental regulations to entry
2. Economies of scale
3. Advantages independent of scale
4. Product differentation

Question 6

Threat of supplier leverage

Answer 6

1. Dominated by a small number of firms
2. Unique or highly differentiated products
3. Suppliers are not threatened by substitutes
4. Forward vertical integration
5. Not so important for suppliers

Question 7

Threat for buyers influence

Answer 7

1. Number of buyers is smal.
2. Threat of backward integration
3. Not a lot of value is added
4. Products are undifferentiated and standard
5. Products to buyers are a significant percentage of a buyers’ final costs

Question 8

there are 4 forms of competitions

Answer 8

Perfect competition
Monoplostic competition
oligopoly
Monopoly

Question 9

Another firm is a complemntor if..

Answer 9

your customers value your product more

Question 10

another firm is a competitor if

Answer 10

your customers value your products less when they have the other firm’s product than when they have your product alone

Question 11

There are for important industry structures

Answer 11

• Declining
• Mature
• Emergent
• Fragmented

Question 12

In a fragmented industry there is/are opportunitie(s) to

Answer 12

Consolidation. -> getting more small companies

Fragmented: a large number of small/medium-sized firms.

Question 13

In a emerging industry there is/are opportunities(s) to

Answer 13

First mover advantage

1. Technological advantage
2. Create switch-costs
3. Preemption of strategically valuable assets

Question 14

in a mature industry there is/are opportunities to

Answer 14

Slowing growth/experienced repeat customers/slowdon in increases in production capacity

1. Product refinment
2. Process innovation
3. Emphasis on service

Question 15

In a declining industry there is/are opportunities to

Answer 15

Harvest
Niche
Divestment
Market leadership