week 3 quiz

Question 1

The IT industry is hypercompetitive because…

Answer 1

it is characterised by continuous disequilibrium and change, where sustainable competitive advantage is hard to achieve.

Question 2

what are switching costs

Answer 2

the one time costs that the customer incurs when switching to a new supplier

Question 3

what is strategic group analysis

Answer 3

identifying firms with similar strategies or competing on similar bases

Question 4

Micheal Porter has argued that the most important factor that determines a firms profitability is…

Answer 4

the attractiveness of the industry

Question 5

which of the following statements about network effects in an industry is correct?
- a.
There are network effects in an industry when one customer of a product or service has a positive effect on the value of that product or service for other customers.

• b.
  Network effects can make an industry less attractive with high barriers to entry, low intensity of rivalry and power over buyers.
• c.
  Reductions in production cost per unit as firms learn by doing.
• d. Increases in demand after products are advertised in a television program.

Answer 5

there are network effects in an industry when one customer of a product or service has a positive effect on the value of that product or service for other customers

Question 6

which industries are dominated by few firms with limited rivalry and firms have power over buyers and suppliers

Answer 6

Oligopoly

Question 7

what is an organisation called if it can enhance another organisations attractiveness to customers

Answer 7

complementor

Question 8

what what stage in the industry life cycle, barriers to entry tend to increase, products or services tend to standardized and buyers may become more powerful

Answer 8

maturity

Question 9

According to Michael Porter’s five forces model, an attractive industry would have all of the following characteristics EXCEPT____________.

• a - a moderate degree of rivalry among competitors.
• b - few good product substitutes.
• c - low barriers to entry.
• d - suppliers with low bargaining power.
• e - low bargaining power of buyers.

Answer 9

a moderate degree of rivalry among competitors

Question 10

All of the following are forces that create high rivalry within an industry EXCEPT ____________.

a. high fixed costs.
b. numerous or equally balanced competitors.
c. high industry growth rate.
d. high exit barriers.

Answer 10

high industry growth rates