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WorksheetsIndustry and Company Analysis
Total questions: 25
Worksheet time: 1hrs 15mins
Which of the following best describes fundamental analysis?
Analysis of past price action to determine future price movements
Analysis based on fixed convictions
Analysis of investor risk appetite
Analysis of the forces that influence the economy
How does PESTLE help your strategic development team?
It helps you to identify the strengths of your company.
It helps you to find solutions to problems, create marketing strategies, and stay ahead of your competition.
It helps you to find the weaknesses of your company.
It helps you to see how your company's financial well-being is affecting the environment.
Competitive rivalry will be high if:
The industry is fragmented
There are a few strong players in the industry
There is a high degree of differentiation
The industry is in its infancy
In Porter's Five Forces, the 'threat of new entrants' relates to:
Barriers to entry
Substitutes
Switching costs
Buyer power
A substitute product or service is:
A competitor's product or service
An alternative way of meeting the same need
A new entrant into the industry
A less attractive way of meeting the same need
Porter’s 5 Forces model helps to do what?
analyze the potential attractiveness and profitability of specific company
analyze the potential attractiveness and profitability of any start-up at any time
analyze the potential attractiveness and profitability of specific industry
analyze the potential attractiveness and profitability of IT start-ups
What are the six elements of PESTLE?
Peace, Elements, Search, Tape, Legal, and Environment
Power, Environment, Science, Teaching, Legal, and Education
Paper, Element, Savings, Trust, Labels, and Entry
Political, Economic, Social, Technological, Legal, and Environmental
An organisation carrying out its value chain activities at a cost lower than its competitors will enable the organisation to achieve:
Differentiation Strategy
Focus Strategy
Hybrid Strategy
Cost Leadership Strategy
Tick the 3 Methods/ Approaches to Internal Analysis.
Resource-based View.
Research-based approach
Value Chain Analysis.
Supply-chain research.
Functional Approach.
A firm's ________ relates to its ability to create value for customers (V) while containing the cost to do so (C).
A) strategic position
B) industry effects
C) advantage of the marketplace
D) industry analysis
A
B
C
D
Managers at Sandburg Real Estate are surprised to hear that interest rates are likely to remain low for the next six months. Which of the following is an implication of low interest rates?
A) Cost of capital for firms will be high.
B) Firms will invest less in future growth.
C) Economic growth rate will fall.
D) Consumer demand will increase.
A
B
C
D
Which of the following statements about the industry life-cycle model is least accurate?
The model is more appropriately used during a period of rapid change than during a period of relative stability.
External factors may cause some stages of the model to be longer or shorter than expected, and in certain cases, a stage may be skipped entirely
Not all companies in an industry will experience similar performance, and very profitable companies can exist in an industry with below average profitability
Industry consolidation and high barriers to entry most likely characterize which life-cycle stage?
Mature
Growth
Embryonic
Shakeout
Decline
Which of the following statements about company analysis is most accurate?
The complexity of spreadsheet modeling ensures precise forecasts of financial statements.
The interpretation of financial ratios should focus on comparing the company’s results over time but not with competitors.
The corporate profile would include a description of the company’s business, investment activities, governance, and strengths and weaknesses
All are correct
With respect to competitive strategy, a company with a successful cost leadership strategy is characterized (Check all that applies)
a low cost of capital.
gain market share.
the ability to offer products at lower prices than competitors.
the ability to take more profit than competitors.
If the technology for an industry involves high fixed capital investment, then one way to seek higher profit growth is by pursuing:
economies of scale.
diseconomies of scale.
removal of features that differentiate the product or service provided.
economies of scope.
product differentiation
11) The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces explains how this aspect of the prescription medicine industry helps keep profitability high?
A) Rivalry Among Existing Firms
B) Threat of New Entrants
C) Threat of Substitutes
D) Bargaining Power of Buyers
E) Bargaining Power of Suppliers
Porter’s 5 Forces model helps to do what?
analyze the potential attractiveness and profitability of specific company
analyze the potential attractiveness and profitability of any start-up at any time
analyze the potential attractiveness and profitability of specific industry
analyze the potential attractiveness and profitability of IT start-ups
A competitor analysis is a detailed analysis of a firm’s competition. There are three approach to analysis your competitor. There are ______ (follow the correct steps)
Identify competitor, identify source of competitive intelligence and complete competitive analysis grid
identify source of competitive intelligence, Identify competitor, and complete competitive analysis grid
identify source of competitive intelligence and Identify competitor
Identify competitor and complete competitive analysis grid
What are the benefits of industry analysis? [Check all that applies]
understanding a company’s business and business environment
identifying active equity investment opportunities
formulating an industry or sector rotation strategy
portfolio performance attribution
High Profitability
Which of the following is least likely to involve industry analysis?
Sector rotation strategy
Top-down fundamental investing
Tactical asset allocation strategy
fundamentals and/or business-cycle conditions
Which of the following factors would most likely be a limitation of applying business-cycle analysis to global industry analysis?
Some industries are relatively insensitive to the business cycle
Correlations of security returns between different world markets are relatively low.
One region or country of the world may experience recession while another region experiences expansion.
all are possible.
