Midterm exam

Question 1

But history tells us that monopolies that are truly benevolent and effective are rare

Answer 1

Michael Porter

Question 2

between incumbents is a threat that reduces the profits of the established enterprises.

Answer 2

Intensity of Rivalry

Question 3

New entrants inject substantial resources and bring new capacity to the industry, thus increasing competition and placing additional pressure on profitability among all players.

Answer 3

Threat of Entry

Question 4

The ability of buyers to bargain down prices

Answer 4

Bargaining Power of Buyers

Question 5

this is the stage wherein the product is new, so there will not have been time for advertising and promotional work to come to fruition.

Answer 5

Introduction

Question 6

It occurs when companies within one industry are forced to compete with industries producing substitute products or services.

Answer 6

Threats of Substitutes

Question 7

Ability of suppliers to bargain up prices charged by firms

Answer 7

Bargaining Power of Suppliers

Question 8

this is the stage wherein sales accelerate markedly as advertising and promotional work comes to fruition, and the product benefits from imitative buying as consumers see it being bought and used by others.

Answer 8

Growth

Question 9

this is the stage wherein the growth in the size of the total market for the product begins to slow.

Answer 9

Maturity

Question 10

this is where market growth comes to an end, and the product is overwhelmed by newer rivals.

Answer 10

Decline

Question 11

low share of the market, but the overall market is growing quickly.

Answer 11

Wildcat Products

Question 12

defined as the situation wherein the overall market is growing quickly and the firm’s product has a good share of the market.

Answer 12

Star Products

Question 13

This is the one where the product in question still has a good share of the market, but where the total market is no longer growing strongly.

Answer 13

Cash Cow Products

Question 14

are those where the total market is not growing and the firm has only a low share of the existing small market.

Answer 14

Dog Products

Question 15

This is characterized by low entry barriers and commodity products that are hard to differentiate

Answer 15

Fragmented Industry

Question 16

firms are interdependent because one firm’s competitive actions or moves directly affect the market share of its rivals and thus their profitability.

Answer 16

consolidated industries

Question 17

Factors that make it costly for potential competitors to enter an industry and compete with firms already in the industry.

Answer 17

Barriers to Entry

Question 18

declines in unit costs of a products the absolute volume per period increases.

Answer 18

Economies of Scale

Question 19

Established firms have brand identification and customer loyalties

Answer 19

Product Differentiation

Question 20

The need to invest large financial resources in order to compete creates a barrier to entry

Answer 20

Capital Requirements

Question 21

A barrier to entry can be created by the new entrant’ s need to secure distribution for its product.

Answer 21

Access to Distribution Channels

Question 22

Established firms may have cost advantages not replicable by potential entrants no matter what their size and attained economies of scale.

Answer 22

Cost Disadvantages Independent of Scale

Question 23

Government can limit or even foreclose entry into industries with such controls as licensing requirements and limits on access to raw materials.

Answer 23

Government Policy

Question 24

one-time costs facing the buyer of switching from one supplier ‘ s product to another.

Answer 24

Switching Costs

Question 25

are those who supply the organization with what it needs to produce the product or service.

Answer 25

Suppliers

Question 26

Where just a few producers dominate supply, suppliers have more power over buyers.

Answer 26

Concentrated Supplier

Question 27

If it is expensive or disruptive to move from one supplier to another, then the buyer becomes relatively dependent and correspondingly weak.

Answer 27

High Switching cost

Question 28

The goods or services of different businesses or industries that can satisfy similar customer needs.

Answer 28

Substitutes Products

Question 29

an intangible one which is instantly perishable and cannot be stored.

Answer 29

product

Question 30

New products must be substantially better value-for-money than those they are replacing, in order for consumers to accept the risks of using them.

Answer 30

Relative Advantage

Question 31

An innovation is unlikely to be successful if it is a
very radical departure from the existing ways in which business is
done in the market sector in question,

Answer 31

Compatibility

Question 32

Some innovations fail because they are perceived as being extremely difficult to use, requiring purchasers to invest a great deal of time and effort in becoming familiar with them.

Answer 32

Complexity

Question 33

It is often easier to persuade consumers to take a series of short steps, rather than one very large and risky one.

Answer 33

Divisibility

Question 34

Customers are unlikely to be persuaded to buy a product if the benefits this product will bring cannot be communicated to them persuasively.

Answer 34

Communicability

Question 35

well-illustrated by applications which can be found both in the aerospace industry, and, by analogy, in airline marketing as well.

Answer 35

Product Life Cycle

Question 36

the collection of all the products or services offered by a company.

Answer 36

Product Portfolio

Question 37

Aircraft is one which can be converted from a passenger to a freighter aircraft quickly

Answer 37

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