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CBC > Porter's 5 Forces > Flashcards

Porter's 5 Forces Flashcards

1
Q

forms part of Credit Risk Rating System (CRRS) whose prime objective is to assess creditworthiness of corporate borrowers.

A

Industry and Competitive Analysis

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2
Q

A borrower’s quality is assed based on its:

A
  1. Financial Condition & Strategies
  2. Industry Profitability, Threats, & Opportunities
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3
Q

What are the porter’s 5 foces?

A
  1. Rivalry among existing competitors
  2. Threats of New Entrants
  3. Bargaining Power of Buyers
  4. Bargaining Power of Suppliers
  5. Threats of Substitutes
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4
Q

True or False: If rivalry among existing competitors are high, profitability high.

A

False. High Threat Low Profit; Low Threat Higher Profit

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5
Q

Refers to the size of the buyer. The smaller the number, the higher the bargaining power

A

Buyer Concentration

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6
Q

Refers to the price of the product versus the actual expense of buyers

A

Product cost vs Buyer’s cost

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7
Q

It is the perceived uniqueness in a product

A

Differentiation

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8
Q

The cost associated with switching from one company to another.

A

Switching costs

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9
Q

Threat of buyer owning the producing firm or threat of supplier owning the producing firm

A

Possibility of forward integration

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10
Q

Refers to how essential the product of the industry to the buyers

A

Importance of Product to Buyer

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11
Q

It refers to the size of the supplier. The smaller the number, the higher the bargaining power.

A

Supplier Concentration

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12
Q

It is the availability of alternative inputs for producing the industry’s products

A

Presence of Substitute

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13
Q

It is whether the industry is a major buyer of the supplier’s products

A

Importance of Volume to the Supplier

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14
Q

Whether supplier’s products represents an essential raw material for the industry

A

Importance of Inputs to the industry

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15
Q

Refers to the cost associated with switching from one supplier to another

A

Switching costs

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16
Q

Whether or not companies in the supplying industry offers differentiated products

A

Differentiation

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17
Q

It is the number of players in the industry.

A

Number of competitors

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18
Q

Growth demand for the product per period

A

Industry Growth

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19
Q

Growth of demand for the product per period

A

Industry Growth

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20
Q

Whether fixed costs account for a large fraction of the firms’ total cost

A

Fixed/Storage Cost

21
Q

Whether competing players offer differentiated products and how high is the cost to the buyers if they switch from one provider to another.

A

Differentiation/ Switching Cost

22
Q

If players differ so widely in goals and strategies

A

Diverse Competitors

23
Q

How far can a firm go to achieve success in the industry

A

High Strategic Stakes

24
Q

Factors that cause a firm to remain in the industry even when the venture is not profitable

A

Exit Barriers

25
Q

Decline in unit cost as volume per period increases

A

Economies of Scale

26
Q

Amount a potential player must raise in joining the industry

A

Capital Requirement

27
Q

The cost associated with switching from an incumbent to a new player

A

Switching Cost

28
Q

How difficult or easy for the new entrant to get its products through existing distribution channels

A

Access to Distribution

29
Q

Government agencies can limit or bar entry by requiring licenses and permits

A

Government Policy

30
Q

Transferring from the industry’s product to the product produced by substitute industry

A

Switching cost

31
Q

Whether the substitute product is better than the industry’s product in terms of features and attributes

A

Performance of Substitute

32
Q

Whether the substitute product is cheaper than the industry’s product.

A

Price of Substitute

33
Q

True or False: If O>R, the outlook is positive and overall assessment is moderate growth?

A

False. Overall assessment is high growth.

34
Q

True or False: If the O=R, the outlook is moderate and the overall assessment is moderate.

A

True

35
Q

True or False: If O<R, the outlook is negative, and the overall assessment is low growth

A

True

36
Q

True or False: Complete information particularly regarding the operations of the account is needed to
be able to come up with proper INDUSTRY CLASSIFICATION that is
necessary in the preparation of Industry
situationers.

A

True

37
Q

It is a type of economic taxonomy that organizes companies into industrial groupings based on similar production processes, similar products, or similar behaviour in financial markets

A

Industry Classification or Industry Taxonomy

38
Q

It is a United Nations System for classifying economic data

A

International Standard Industrial Classification of All Economic Activities (ISIC)

39
Q

It is patterned after the ISIC. It is published by the Philippine Statistics Authority (PSA).

A

Philippine Standard Industrial Classification (PSIC)

40
Q

What are the different industry classifications?

A
  1. North American Industry Classification System (NAICS), 2. Standard Industrial Classification (SIC)
  2. Global Industry Classification Standard (GICS)
41
Q

True or False: PSIC serves as a guide in the classification of establishments according to their economic activity.

A

True.

42
Q

As per _________ it is required to provide the PSIC of an account for its respective Credit Recommendation Memo (CRM)

A

Credit Policy

43
Q

Generate data for reports such as the Exposure Reports useful for the Management, Industry Analysis Report, Portfolio Analysis, etc.

A

PSIC

44
Q

Information necessary for industry classification

A
  1. FS
  2. Clients & Suppliers List
  3. Identified Competitors
  4. For start-ups (with no reflected revenues)
45
Q

It defines environmental and social risk as potential, financial, legal, and/ or reputational negative effect of environmental and social issues on the bank.

A

BSP Circular No. 1085

46
Q

True or False: Reports are released to the AQRMD-CRE and a copy of the report is
also sent to the Lending
Units via Outlook.

A

True

47
Q

Industry Analysis is under what department?

A

CMG- Credit and Market Research Department

48
Q

CMRD also provides:

A
  1. Industry Report
  2. Sovereign Risk Report
  3. Economic Reports
  4. CMG i-Watch
  5. idus360
49
Q

Copies of the report is
also uploaded in our

A

CMRD SharePoint Side

CBC (7 decks)

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