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Applied Economics > Industry Analysis > Flashcards

Industry Analysis Flashcards

1
Q

This is beneficial in identifying opportunities and threats so that firms can have a strong idea of the present and future scenarios of the industry they belong to.

A

Industry analysis

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2
Q

Entrepreneurs conduct __________________ to understand the business’ state and degree of competition and help them strategize better.

A

industry analysis

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3
Q

Four (4) ways business opportunities can be identified

A

Listen to potential clients and past leads
Listen to your customers
Listen to your competitors
Look at industry trends and insights

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4
Q

It can help the firm expand and identify business opportunities.

A

Listen to your customers

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4
Q

This can be done by consolidating frequently asked questions, experiences, frustrations, feedback, and complaints.

A

Listen to your customers

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5
Q

listen to the needs, wants, and challenges they experienced in your industry.

A

Listen to potential clients and past leads

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5
Q

This can help the firm develop more tailored products and services, refine its target market, and overcome common objections and complaints about the products/services.

A

Listen to potential clients and past leads

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6
Q

Competitor analysis can help identify key business opportunities to expand the firm’s market reach and develop products and services.

A

Listen to your competitors

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6
Q

The entrepreneur must know what other firms are doing.

A

Listen to your competitors

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7
Q

The entrepreneur must continue to educate himself about the latest trends and techniques by joining relevant associations, subscribing to different publications, and following industry experts’ social media accounts.

A

Look at industry trends and insights

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8
Q

_________________ can help identify key business opportunities to expand the firm’s market reach and develop products and services.

A

Competitor analysis

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9
Q

This refers to the area the firm caters to.

A

Geographic area

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10
Q

The firm estimates how big the industry is and the trends which present special opportunities or challenges to the firm.

A

Industry size and outlook

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10
Q

It also looks at the industry outlook for the next three (3) to five (5) years.

A

Industry size and outlook

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10
Q

Industry size and outlook looks at the industry outlook for the next_______ to _______ years.

A

three (3) to five (5) years

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10
Q

Below are the key factors in analyzing the industry

A

Geographic area
Industry size and outlook
Factors affecting the growth of the firm
Identification of leading businesses in the Industry

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11
Q

The firm considers personal and behavioral attributes of the head of the firm, business structure, outside forces that the firm has no control of, location, financial stability of the firm, and new markets or products/services which can affect the growth of the firm.

A

Factors affecting the growth of the firm

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12
Q

Having information on the most successful firms in their industry can inspire and motivate them to be like them.

A

Identification of leading businesses in the Industry

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13
Q

Types of Industries

A

Primary industry
Secondary Industry
Tertiary Indistry

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13
Q

This sector consists of agriculture, forestry, fishing, mining, quarrying, and the extraction of minerals.

A

Primary industry

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13
Q

This consists of agriculture, forestry, livestock management, and fishing.

A

Genetic industry

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13
Q

Primary industry two (2) categories

A

Genetic industry
Extractive industry

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14
Q

The production of raw materials by firms can be improved and increased due to scientific and technological improvements to these renewable resources.

A

Genetic industry

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15
Q

This consists of mining mineral ores, quarrying stones, and extracting mineral fuels.

A

Extractive industry

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16
Q

Firms in this industry produce exhaustible raw materials that cannot be augmented through cultivation.

A

Extractive industry

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17
Q

It is also known as the manufacturing industry.

A

Secondary industry

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18
Q

This sector consists of the construction and energy-producing industries.

A

Secondary industry

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19
Q

It processes raw materials into consumer goods.

A

Secondary industry

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19
Q

This industry builds on capital goods in manufacturing products/goods.

A

Secondary industry

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20
Q

It can further process the transformed products of other secondary industries.

A

Secondary industry

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21
Q

It is also known as the service industry.

A

Tertiary industry

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22
Q

The firm’s revenues come from providing intangible products.

A

Tertiary industry

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23
Q

It directs how economic value is divided among industry actors.

A

Michael Porter’s Five-Forces Model of Competition

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23
Q

is a framework for understanding the competitive forces in an industry.

A

Michael Porter’s Five-Forces Model of Competition

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24
Q

An analysis of the five (5) forces helps firms evaluate the industry attractiveness, trends and how those affect the following:

A

Industry competition

Whichever industries a firm must compete in

Ways on how firms can position themselves for success.

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24
Q

A force can be considered a _________ force if strong and weak situations exist.

A

moderate force

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25
Q

The strength of each force could be ______, _________, or _______.

A

strong, moderate, or weak

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26
Q

Michael Porter’s five (5) forces

A

Rivalry among competing sellers
Buyer bargaining power
Supplier bargaining power
The threat of potential new entrants
The threat of substitute products or services

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26
Q

The competitive pressures are created by the jockeying of rival sellers for a better market position and competitive advantage.

A

Rivalry among competing sellers

27
Q

The competitive pressures stem from the collaboration and bargaining of suppliers and sellers.

A

Supplier bargaining power

27
Q

The competitive pressures stemming from the collaboration and bargaining of buyers and sellers.

A

Buyer bargaining power

27
Q

The competitive pressures are coming from the threats of entry of new rivals.

A

The threat of potential new entrants

28
Q

Identify if it’s strong, weak, or moderate force

There is a rise in the diversity of competitors concerning long-term directions, objective strategies, and countries of origin. There is a slowly growing buyer demand.

A

Strong Rivalry among competing sellers

28
Q

The competitive pressures are coming from the market attempts of outsiders to win buyers over to their products.

A

The threat of substitute products or services

29
Q

Identify if it’s strong, weak, or moderate force

There are high switching costs for buyers

A

Weak Rivalry among competing sellers

30
Q

Identify if it’s strong, weak, or moderate force

There is a rapidly growing buyer demand

A

Weak Rivalry among competing sellers

30
Q

Identify if it’s strong, weak, or moderate force

There is high customer loyalty, and the rival seller’s products are strongly differentiated.

A

Weak Rivalry among competing sellers

30
Q

Identify if it’s strong, weak, or moderate force

As the buyer demand decreases, the sellers now have excess capacity or inventory.

A

Strong Rivalry among competing sellers

30
Q

Identify if it’s strong, weak, or moderate force

There are low switching costs for buyers.

A

Strong Rivalry among competing sellers

31
Q

Identify if it’s strong, weak, or moderate force

The rival sellers’ products are weakly differentiated or are considered commodities.

A

Strong Rivalry among competing sellers

31
Q

Identify if it’s strong, weak, or moderate force

There is an increase in the number of rivals of roughly equal size and competitive capability.

A

Strong Rivalry among competing sellers

32
Q

Identify if it’s strong, weak, or moderate force

There are high exit barriers, keeping unprofitable businesses from leaving the industry.

A

Strong Rivalry among competing sellers

33
Q

Identify if it’s strong, weak, or moderate force

There is a low switching cost to competing brands or substitute products.

A

Strong Buyer bargaining power

34
Q

Identify if it’s strong, weak, or moderate force

Large buyers demand concessions when buying large quantities.

A

Strong Buyer bargaining power

35
Q

Identify if it’s strong, weak, or moderate force

There is weak buyer demand, or it is already declining.

A

Strong Buyer bargaining power

35
Q

Identify if it’s strong, weak, or moderate force

It is important for sellers that buyers have large volume purchases.

A

Strong Buyer bargaining power

36
Q

Identify if it’s strong, weak, or moderate force

Since there are only a few buyers, every transaction is important to sellers.

A

Strong Buyer bargaining power

37
Q

Identify if it’s strong, weak, or moderate force

The sellers consider the buyer’s identity as adding prestige to their list of customers.

A

Strong Buyer bargaining power

38
Q

Identify if it’s strong, weak, or moderate force

There is an improvement in the quantity and quality of available information to buyers.

A

Strong Buyer bargaining power

39
Q

Identify if it’s strong, weak, or moderate force

There is the threat of backward integration for some buyers. The firms become sellers themselves. To do a backward integration, a firm purchases another firm, the supplier of the products or services needed for production.

A

Strong Buyer bargaining power

40
Q

Identify if it’s strong, weak, or moderate force

If buyers dislike the seller’s prices, they can postpone their purchases.

A

Strong Buyer bargaining power

40
Q

Identify if it’s strong, weak, or moderate force

There are high buyer switching costs to competing brands or substitute products.

A

Weak Buyer bargaining power

41
Q

Identify if it’s strong, weak, or moderate force

There is an infrequent purchase of items by the buyers, or they are purchasing the item in small quantities.

A

Weak Buyer bargaining power

42
Q

Identify if it’s strong, weak, or moderate force

There is an increase in buyer demand, creating a “sellers’ market.”

A

Weak Buyer bargaining power

43
Q

Identify if it’s strong, weak, or moderate force

The brand reputation of the seller is significant to the buyer.

A

Weak Buyer bargaining power

44
Q

Identify if it’s strong, weak, or moderate force

Other brands do not match the delivered product quality or performance of a seller’s product.

A

Weak Buyer bargaining power

45
Q

Identify if it’s strong, weak, or moderate force

There are high switching costs for industry members to alternative suppliers.

A

Strong Supplier bargaining power

46
Q

Identify if it’s strong, weak, or moderate force

A short supply of needed inputs gives suppliers more leverage in setting prices.

A

Strong Supplier bargaining power

47
Q

Identify if it’s strong, weak, or moderate force

Having differentiated input, a supplier enhances the seller’s product’s image, quality, and performance. A supplier having differentiated input is a critical or valuable part of the production processes of the seller.

A

Strong Supplier bargaining power

48
Q

Identify if it’s strong, weak, or moderate force

There are only a few suppliers for a certain output.

A

Strong Supplier bargaining power

49
Q

Identify if it’s strong, weak, or moderate force

The supplied item is considered a commodity and is readily available from many suppliers at the current market price.

A

Weak Supplier bargaining power

50
Q

Identify if it’s strong, weak, or moderate force

There are low switching costs for sellers to alternative suppliers.

A

Weak Supplier bargaining power

51
Q

Identify if it’s strong, weak, or moderate force

There are new substitutes that emerge.

A

Weak Supplier bargaining power

52
Q

Identify if it’s strong, weak, or moderate force

There is an increase in the availability of supplies. This greatly weakens supplier pricing power.

A

Weak Supplier bargaining power

53
Q

Identify if it’s strong, weak, or moderate force

There is a chance for industry members to integrate backward (to be suppliers themselves) or self-manufacture what they need.

A

Weak Supplier bargaining power

53
Q

Identify if it’s strong, weak, or moderate force

A big fraction of the suppliers’ total sales are from industry members. It is vital for the suppliers’ well-being that industry members continue having high-volume purchases.

A

Weak Supplier bargaining power

53
Q

Identify if it’s strong, weak, or moderate force

There is a large entry pool of candidates. Some of the candidates have the resources that make them formidable market contenders.

A

Strong The threat of potential new entrants

54
Q

Identify if it’s strong, weak, or moderate force

There are low entry barriers, or such barriers can be readily hurdled by new candidates.

A

Strong The threat of potential new entrants

54
Q

Identify if it’s strong, weak, or moderate force

Looking to expand their market reach, existing industry members enter product segments or geographic areas where currently, they do not have a presence.

A

Strong The threat of potential new entrants

54
Q

Identify if it’s strong, weak, or moderate force

Earning attractive profits is expected by newcomers.

A

Strong The threat of potential new entrants

54
Q

Identify if it’s strong, weak, or moderate force

There is rapidly growing buyer demand.

A

Strong The threat of potential new entrants

55
Q

Identify if it’s strong, weak, or moderate force

There is rapidly growing buyer demand.

A

Strong The threat of potential new entrants

55
Q

Identify if it’s strong, weak, or moderate force

There is a small pool of entry candidates.

A

Weak The threat of potential new entrants

56
Q

Identify if it’s strong, weak, or moderate force

Unable to strongly contest the entry of newcomers by industry members or unwilling to do so.

A

Strong The threat of potential new entrants

57
Q

Identify if it’s strong, weak, or moderate force

The existing competitors struggle to have good profits.

A

Weak The threat of potential new entrants

58
Q

Identify if it’s strong, weak, or moderate force

There are high entry barriers.

A

Weak The threat of potential new entrants

59
Q

Identify if it’s strong, weak, or moderate force

There is a risky or uncertain industry outlook.

A

Weak The threat of potential new entrants

60
Q

Identify if it’s strong, weak, or moderate force

There is a stagnant buyer demand, or the buyer demand is slowly growing.

A

Weak The threat of potential new entrants

61
Q

Identify if it’s strong, weak, or moderate force

The industry members would strongly contest the new entrants’ efforts to gain a market foothold.

A

Weak The threat of potential new entrants

62
Q

Identify if it’s strong, weak, or moderate force

There are readily available good substitutes, or new ones are emerging.

A

Strong The threat of substitute products or services

63
Q

Identify if it’s strong, weak, or moderate force

There are available substitutes that have comparable or better performance features.

A

Strong The threat of substitute products or services

64
Q

Identify if it’s strong, weak, or moderate force

There are attractively priced substitutes.

A

Strong The threat of substitute products or services

65
Q

Identify if it’s strong, weak, or moderate force

There are low switching costs to substitutes for end-users.

A

Strong The threat of substitute products or services

65
Q

Identify if it’s strong, weak, or moderate force

There are no readily available good substitutes, or they do not exist.

A

Weak The threat of substitute products or services

65
Q

Identify if it’s strong, weak, or moderate force

The end-users become more used to using substitutes.

A

Strong The threat of substitute products or services

66
Q

Identify if it’s strong, weak, or moderate force

Substitutes are priced higher in proportion to their delivered performance.

A

Weak The threat of substitute products or services

67
Q

Identify if it’s strong, weak, or moderate force

There is a high switching cost to substitutes for end-users.

A

Weak The threat of substitute products or services

Applied Economics (10 decks)

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