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MGMT 466 > MGMT 466 Exam 1 - FLASHCARDS - Chapter 2 > Flashcards

MGMT 466 Exam 1 - FLASHCARDS - Chapter 2

1
Q

True or false: the external environment affects the competitive actions and responses firms take to outperform competitors and earn above-average returns?

A

TRUE

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2
Q

What is the general environmnt?

A

Composed of dimensions in the broader society that influence an industry and the firms within it

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3
Q

What are aspects of the general environment?

A

Demographic
Economic
Political/legal
Sociocultural
Technological
Global
Sustainable physical environment

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4
Q

What is the industry environment?

A

Set of factors that directly influences a firm and its competitive actions and responses

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5
Q

True or false: How companies gather and interpret information about their competitors is called competitor analysis?

A

TRUE

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6
Q

What does analysis of the industry environment focus on?

A

the factors and conditions influencing an industry’s profitability potential

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7
Q

What does analysis of the general environment focus on?

A

environmental trends and their implications

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8
Q

What are the four parts of an external environmental analysis?

A
  1. Scanning
  2. Monitoring
  3. Forecasting
  4. Assessing
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9
Q

What is identifying early signals of potential changes in the general environment and detecting changes that are already under way?

A

Scanning

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10
Q

What is seeing if an important trend is emerging from among those spotted through scanning?

A

Monitoring

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11
Q

What is developing feasible projections of what might happen, and how quickly?

A

Forecasting

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12
Q

What is determining the timing and significance of the effects? Appropriately interpreting– opportunity or threat

A

Assessing

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13
Q

Must each firm scan, monitor, forecast, and assess the elements in each general environmental segment to predict their effects on it?

A

Yes

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14
Q

What elements are included in the demographic segment of the general environment?

A

population’s size, age structure, geographic distribution, ethnic mix, and income distribution

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15
Q

What segment of the general environment deals with the nature and direction of the economy?

A

Economic segment

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16
Q

What is included in the economic segment of the general environment?

A

Inflation rates
Interest rates
Trade deficits or surpluses
Budget deficits or surpluses
Personal savings rate
Business savings rates
Gross domestic product

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17
Q

What segment is about how organizations try to influence governments, to understand the current and projected influences of those governments on their competitive actions and responses?

A

Political/legal segment

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18
Q

What segment is about society’s attitudes and cultural values?

A

Sociocultural segment

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19
Q

What are examples of the socicultural segment?

A

caring about health, working from home

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20
Q

Example of adversarial

A

we didn’t do it

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21
Q

What segment has to do with creating new knowledge and translating that knowledge into new outputs, products, processes, and materials?

A

Technological segment

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22
Q

What is a group of firms producing products that are close substitutes?

A

Industry

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23
Q

True or false: coke and pepsi are substitute products because they are in the same industry?

A

TRUE

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24
Q

What do new entrants do?

A

bring new capacity and desire to gain market share. Pressure on prices, costs, investment. Put a cap on profit potential of the industry

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25
True or false: Particularly when new entrants are diversifying from other markets, they can leverage existing capabilities and cash flows to shake up competition?
TRUE
26
True or false: When the threat of new entrants is high, incumbents must hold down prices or boost investments to deter new competitors?
TRUE
27
What are different barriers to entry?
Switching Costs. Capital Requirements Product Differentiation Economies Of Scale Access To Distribution Channels Cost Disadvantages Independent Of Scale Government Policy
28
What is it called when the cost of producing each unit declines as the quantity of a product produced during a given period increases?
Economies of scale
29
True or false: product differentiation is a barrier to entry?
TRUE
30
True or false: switching costs are a barrier to entry for new firms?
TRUE
31
True or false: Starbucks has low barriers to entry?
TRUE
32
True or false: Slow industry growth increases rivalry?
TRUE
33
What is expected retaliation?
An expectation of swift and vigorous competitive responses reduces the likelihood of entry
34
When can vigorous retaliation be expected?
when the existing firm has a major stake in the industry, when it has substantial resources, and when industry growth is slow or constrained
35
True or false: Small entrepreneurial firms are generally best suited for identifying and serving neglected market segments?
TRUE
36
What is bargaining power of suppliers?
Suppliers can exert power, either increasing prices or reducing quality
37
What do buyers bargain for?
Higher quality, greater levels of service, and lower prices
38
True or false: buyers are powerful when they purchase a large portion of an industry’s total output?
TRUE
39
What are goods or services from outside a given industry that perform similar or the same functions as a product that the industry produces?
Substitute products
40
True or false: substitute products present a threat to a firm when customers face few, if any, switching costs?
TRUE
41
True or false: substitute products present a threat to a firm when the substitute product’s price is lower?
TRUE
42
True or false: substitute products present a threat to a firm when the substitute product’s quality and performance capabilities are equal to or greater than those of the competing product?
TRUE
43
What can a firm do do differentiate a substitute's attractiveness?
a firm can differentiate a product along dimensions that are valuable to customers, such as: Quality Service after the sale Location
44
What are factors that increase the intensity of rivalries among firms?
Numerous or equally balanced competitors Slow industry growth High fixed costs or high storage costs Lack of differentiation or low switching costs High strategic stakes Strategic Commitments-- costly, long-term oriented, and difficult to reverse. High exit barriers
45
What are products of careful study and interpretation of data and information from multiple sources?
Effective industry analyses
46
Within a firm's effective industry analysis, international markets and rivalries must be included?
Yes
47
True or false: an attractive industry has low entry barriers?
False. An attractive industry has high entry barriers
48
True or false: an attractive industry has suppliers and buyers with little bargaining power?
TRUE
49
True or false: an attractive industry has few competitive threats from product substitutes?
TRUE
50
True or false: an attractive industry has relatively moderate rivalry?
TRUE
51
True or false: an unattractive industry has low entry barriers?
TRUE
52
True or false: an unnatractive industry has suppliers and buyers with strong bargaining power?
TRUE
53
True or false: an unnatractive industry has strong competitive threats from product substitutes?
TRUE
54
True or false: an unnatractive industry has intense rivalry among competitors?
TRUE
55
What is a set of firms emphasizing similar strategic dimensions and using a similar strategy?
Strategic group
56
True or false: competitive rivalry is greater within a strategic group than between strategic groups?
TRUE
57
Using strategic groups to understand an industry’s competitive structure requires the firm to plot companies’ competitive actions and responses along strategic dimensions, such as what?
Pricing Decisions Product Quality Distribution Channels
58
True or false: The competitive rivalry among strategic groups can be intense?
TRUE
59
True or false: The more intense the rivalry between strategic groups, the greater is the threat to each firm’s profitability?
TRUE
60
True or false: The closer the strategic groups are in terms of their strategies, the greater is the likelihood of rivalry between the groups?
TRUE
61
What are companies or networks of companies that sell complementary goods or services that are compatible with the focal firm’s good or service?
Complementers
62
What is example of a complementer?
Intel and Microsoft - using Intel chips in Microsoft products
63
When is a company a complementer to your company?
A company is a complementor to your company if customers value your product or service offering more when they are able to combine it with the other company’s product or service
64
Supplier power can erode - appliances in big box stores erode because of online shopping
.
65
What focuses on each company against which a firm competes directly?
Competitor analysis
66
What does the firm try to understand during competitor analysis?
1. What drives the competitor, as shown by its future objectives 2. What the competitor is doing, as revealed by its current strategy 3. What the competitor believes about the industry, as shown by its assumptions 4. What the competitor’s capabilities are, as shown by its strengths and weaknesses
67
Porter's 5 forces pertain to all different industries
.
68
What are porter’s 5 forces?
Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threat of new substitutes Competitive rivalry
69
What is the current market share of beats?
15.3

MGMT 466 (9 decks)

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