WorksheetsTest Lesson 2 PSU MGT 403
Total questions: 20
Worksheet time: 20mins
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 being served.
all the relevant forces and factors outside a company’s boundaries–general economic conditions, population demographics, societal values and lifestyles, technological factors, and governmental legislation and regulation.
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 macro-environment?
Conditions in the economy at large
Population demographics and societal values and lifestyles
Technological factors
Governmental regulations and legislation
The company’s resource strengths, resource weaknesses, and competitive capabilities
Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry?
How many companies in the industry have good track records for revenue growth and profitability?
What strategic moves are rivals likely to make next?
What are the key factors for future competitive success?
Does the outlook for the industry offer good prospects for profitability?
What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?
Which of the following is not a factor to consider in identifying an industry’s dominant economic features?
The market size, growth rate and prospects
The scope of competitive rivalry including geographic area
The market demand-supply conditions
How strong driving forces and competitive forces are
The role and pace of technological change
The state of competition in an industry is a function of
the competitive pressures associated with rivalry among competing sellers to attract customers.
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 (vận động và chạy đua) for buyer patronage that goes on among rival sellers in the industry
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 change in 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.
The steps involved in driving forces analysis are:
developing a comprehensive list of all the potential causes of changing industry conditions.
predicting which new driving forces will emerge next.
determining which of the five competitive forces is the biggest driver of industry change.
identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes are needed to prepare for the impact of the driving forces.
All of these
Industry conditions change:
because of such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers.
because of newly emerging industry threats and industry opportunities that alter the composition of the industry’s strategic groups.
because new industry key success factors emerge.
because forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions in important ways.
chiefly because of changes in the barriers to entry and the degree of competition from substitute products.
A strategic group:
consists of those industry members that are growing at about the same rate and have similar product line breadth.
includes all rival firms having comparable profitability.
is a cluster of industry rivals that have similar competitive approaches and market positions.
consists of those firms whose market shares are about the same size.
is made up of those firms having comparable profit margins.
One important indicator of how well a company’s present strategy is working is whether:
it has more core competencies than close rivals.
its strategy is built around at least two of the industry’s key success factors.
the company is achieving gains in financial strength.
it has been able to create new industry demand through the use of a blue ocean strategy.
it is subject to weaker competitive forces and pressures than close rivals (a good sign).
Which one of the following is not a reliable measure of how well a company’s current strategy is working?
Trends in the company’s sales and earnings growth
The company’s development of human capital, organizational capital, and information capital
Changes in the firm’s image and reputation with its customers
The company’s overall financial strength
Evidence of improvement in internal processes such as defect rate, order fulfillment, and employee productivity.
A resource-based strategy:
is often based on cross-department combinations of intellectual capital and expertise.
uses a company’s valuable and rare resources and competitive capabilities to deliver value to customers that rivals have difficulty matching.
is typically based on a stand-alone resource strength such as technological expertise.
refers to a company’s most efficiently executed value-chain activity.
uses industry key success factors to provide a company with a core competence that rivals cannot effectively imitate.
A resource-based strategy:
focuses on exploiting a company’s best-executed operating strategy.
is based upon efficient performance of the company’s primary value chain activities.
concentrates on minimizing the costs associated with the design of a product or service.
attempts to exploit resources in a manner that offers value to customers in ways rivals are unable to match.
focuses on working with forward channel allies to develop capabilities to outmatch the capabilities of rivals.
One of the most telling signs of whether a company’s market position is strong or precarious is:
whether its product is strongly or weakly differentiated from rivals.
whether its prices and costs are competitive with those of key rivals.
whether it has a lower stock price than key rivals.
the opinions of buyers regarding which seller has the best product quality and customer service.
whether it is in a bigger or smaller strategic group than its closest rivals.
Two analytical tools useful in determining whether a company’s prices and costs are competitive are:
SWOT analysis and key success factor analysis.
SWOT analysis and benchmarking.
value chain analysis and benchmarking.
competitive position assessment and competitive strength assessment.
driving forces analysis and SWOT analysis.
The value of doing competitive strength assessment is to:
determine how competitively powerful the company’s core competencies are.
learn if the company’s market opportunities are better than those of its rivals.
learn whether a company has a distinctive competence.
learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals.
determine whether a company’s resource strengths are sufficient to allow it to earn bigger profits than rivals.
Doing a competitive strength assessment entails:
determining whether a company has a cost-effective value chain.
ranking the company against major rivals on each of the important factors that determine market success and ascertaining whether the company has a net competitive advantage or disadvantage versus major rivals.
identifying a company’s core competencies and distinctive competencies (if any).
analyzing whether a company is well positioned to gain market share and be the industry’s profit leader.
developing quantitative measures of a company’s chances for future profitability.
Identifying the strategic issues a company faces and compiling a “worry list” of problems and roadblocks is an important component of company situation analysis because:
without a precise fix on what problems/issues a company confronts, managers cannot know what the industry’s key success factors are.
the “worry list” sets the management agenda for taking actions to improve the company’s performance and business outlook.
without a precise fix on what problems/roadblocks a company confronts, managers are less clear about what value chain activities to benchmark.
Which of the following is not accurate as concerns the task of identifying the strategic issues and problems that merit front-burner managerial attention?
A. It entails drawing upon the results and conclusions from analyzing the company’s external environment.
B. It entails drawing on the results and conclusions from evaluating the company’s own resources and
competitive position.
C. It entails developing a “worry list” of problems and issues for managerial strategy making.
*D. Identifying the strategic issues and problems that the company faces is the first thing that company
managers need to do before starting to analyze the company’s internal and external environment.
E. Developing a list of what issues and problems that managements needs to address (and to resolve)
should always precede deciding upon a strategy and what actions to take to improve the company’s
position and prospects.
