Strategic Management - Midterm Examination

Which of the following best describes the competitive environment?

• The national economy’s overall performance

• The situation an organization faces within its specific area of operation

• A set of unrelated firms producing different goods

• The government’s economic policy decisions

In Porter’s Five Forces framework, which force considers the possibility of new firms entering the market?

• Threat of substitutes

• Bargaining power of buyers

• Competitive rivalry

• Threat of new entrants

Which of the following is NOT a barrier to entry mentioned in the text?

• Economies of scale

• Brand loyalty

• Access to distribution channels

• Low switching costs

The learning curve advantage for existing firms is an example of:

• Cost disadvantage independent of scale

• Experience effect

• Switching cost

• Forward integration

A market where a few firms dominate and products are differentiated is an example of:

• Perfect competition

• Monopoly

• Oligopoly

• Monopsony

Which factor increases the bargaining power of suppliers?

• Buyers purchasing in large volumes

• Few suppliers dominating the industry

• Low switching costs for buyers

• Suppliers relying heavily on one buyer

When suppliers can move forward in the value chain to compete with their buyers, it is called:

• Backward integration

• Forward integration

• Horizontal integration

• Lateral integration

Which of the following strengthens the bargaining power of buyers?

• High product differentiation

• Large volume purchases

• Lack of price sensitivity

• High switching costs

Substitutes put a price ceiling on products because:

• They are always cheaper

• Customers can easily switch if prices rise

• They are usually better quality

• They are protected by patents

Competitive rivalry tends to be LOW in:

• Oligopoly markets

• Monopoly markets

• Markets with short innovation cycles

• Unstable environments