Bussiness

Hill/Jones, Strategic Management 9e

Audio Quiz

Chapter Two

Let’s test your understanding of the material covered in chapter two, “External Analysis: The Identification of Opportunities and Threats.”

1.) True or False. Economies of scale, brand loyalty, absolute cost advantage, switching costs, and government regulation are examples of barriers to exit.

[Pause] If you answered false, you’re right.

If you answered true, recall that these are barriers to entry for firms trying to establish themselves in an industry.

2.) True or False. One competitive force often affects the others, so all forces need to be considered and thought about when performing industry analysis.

[Pause] If you answered true, you’re right.

If you answered false, consider that the forces are interrelated. If the threat of substitute products increased a company may try to decrease cost with suppliers and increase the price to buyers.

3.) True or False. In the decline stage, demand approaches saturation levels: most of the demand is limited to replacement because there are few potential first-time buyers left.

[Pause] If you answered false, you’re right.

If you answered true, note that this is the definition for the shakeout stage. In decline growth becomes negative.

4.) True or False. Barriers to international trade and investment have tumbled, and more and more countries are enjoying sustained economic growth.

[Pause] If you answered true, you’re right.

If you answered false, remember that falling barriers to international trade and investment have made it much easier to enter foreign markets.

5.) Multiple Choice. Which one of the following is NOT one of Porter’s Five Forces:

a) Bargaining Power of Buyers

b) Industry Rivalry

c) Political Forces

[Pause] If you answered (c), you’re right.

Political forces are part of the macroenvironment, but are not part of Porter’s Model.

6.) True or False. The threat of substitute products...