Chapter 3 Evaluation Company External Environment

A company's "macro-environment" refers to

• The industry and competitive arena in which the company operates

• general economic conditions plus the factors driving change in the markets where a company operates.

• all the relevant forces and factors outside a company's boundaries—general economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation, and closer to home, the industry and competitive arena in which it operates

• the competitive market environment that exists between a company and its competitors.

• the dominant economic features of a company's industry

Which one of the following is not part of a company's macroenvironment?

• Conditions in the economy at large

• Population demographics and societal values and lifestyles

• Technological factors and governmental regulations and legislation

• The industry and competitive environment arena in which the company operates

• The company's resource strengths, resource weaknesses, and competitive capabilities

Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as

• the forces driving change in the industry.

• the dominant economic features of the industry in which the company operates.

• the kinds of competitive forces industry members are facing and the strength of each competitive force.

• the key factors influencing future competitive success in the industry.

• All of these.

Which of the following is not a factor to consider in identifying an industry's dominant economic features?

• Market size and growth rate

• The extent of backward integration of buyer needs and requirements

• Whether the products or services of rival firms are becoming more or less differentiated

• Strength of driving forces and competitive forces

• The pace of technological change, scale economies and experience curve effects, and product innovation

The state of competition in an industry is a function of

• the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry.

• competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products.

• competitive pressures associated with the threat of new entrants into the marketplace.

• competitive pressures associated with the bargaining power of suppliers and customers.

• All of these

Which of the following is not one of the five typical sources of competitive pressures?

• The power and influence of industry driving forces

• The bargaining power of suppliers and seller-supplier collaboration

• The threat of new entrants into the market

• The attempts of companies in other industries to win customers over to their own substitute products

• The market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

Which one of the following does not cause the rivalry among competing sellers to be weak?

• High buyer switching costs

• Rapid growth in buyer demand

• Industry conditions that tempt rivals to use price cuts or other competitive weapons to boost unit sales

• Low barriers to entry

• Strongly differentiated products among rival sellers

Factors that tend to result in weak rivalry among competing sellers include

• low buyer switching costs and low barriers to entry

• rapid growth in buyer demand, high buyer costs to switch brands, and so many industry rivals that any one company's actions have little impact on rivals' businesses.

• weakly differentiated products among rival sellers

• rivals that are quite diverse in terms of their strategies, objectives, and countries of origin

• conditions where outsiders have recently acquired weak competitors and are trying to turn them into major contenders.

Which of the following is not a good example of a substitute product that triggers stronger competitive pressures?

• A salad as a substitute for French fries

• Wireless phones as a substitute for wired telephones

• Coca-Cola as a substitute for Pepsi

• Snowboards as a substitute for snow skis

• Video-on-demand services from a cable TV company as a substitute for going to the movies

The "driving forces" in an industry

• are usually triggered by changing technology or stronger learning/experience curve effects.

• usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers.

• are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

• appear when an industry begins to mature but are seldom present during early stages of the industry life-cycle.

• are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.