Chapter 10 SSA

Which of the following statements is false?

• The stronger the threat of entry, the more competition there will be leading to lower demand and prices.

• The threat of new entrants into an industry can force current players to keep prices stable and spend more to retain customers.

• 1. The threat of entry puts a cap on the profit potential of an industry.

• None of the choices.

Answer explanation

Down not stable.

Statement 1: Buyers create demand in the industry and thus tend to have a strong negotiating power.

Statement 2: Buyer power is highest when buyers are large relative to the competitors serving them, products are differentiated and represent a insignificant cost for the buyer, and there are few switching costs to shifting business from one competitor to another.

• Statement 1 is True

• Statement 2 is True

• Both statements are false

• Both statements are true

Answer explanation

undifferentiated/significant

Statement 1: Suppliers can influence the price of goods or services in the industry and ultimately drive up industry profits.

Statement 2: Powerful suppliers can use their negotiating leverage to charge lower prices or demand more favorable terms from industry competitors which lowers industry profitability.

• Both statements are true

• Both statements are false

• Statement 1 is true

• Statement 2 is true

This framework facilitates industry structure to identify potential threats to a company’s value proposition.

It is another product or service that meets the same underlying need that the industry’s product meets in a different way.

STEEP stands for

• Society, technology, economy, environmental, and politics

• socio-economic, technological, economic, ecological, and political

• Social, technology, economic, ecological, and political

• Social, technological, economic, ecological, and political

It considers the general environment in which the company operates.

A process that stimulates imaginative, creative thinking to better prepare an organization for the future.

This includes the consideration of demographics, customs, religious beliefs, lifestyles, and mobility.

It considers trends and advances in digital communication, biotechnology, chemicals, electronics, medicine, and many other fields that might affect the companies’ competitiveness.