Campaign Spotlight 2
Chapter 11: Dealing with Competition
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Which of the following would NOT be among Porter’s five forces? a. Industry competitors b. Technological partners c. Substitutes d. Buyers e. Potential entrants
Answer: b Page: 328 Difficulty: Medium
2. When entry and exit barriers are high, ________. a. profit potential is high, but firms face more risk because poorer-performing firms stay in and fight it out b. firms easily enter and leave the industry, and returns are stable and low c. few new firms can enter the industry, and poorly performing firms can easily exit d. firms enter during good times but find it hard to leave during bad times, resulting in chronic overcapacity and depressed earnings for all e. none of the above
Answer: a Page: 328 Difficulty: Medium AACSB: Analytic Skills
3. A segment is unattractive when there are actual or potential ________ for the product. a. contenders b. competitors c. substitutes d. unclear demand e. profit fluctuation
Answer: c Page: 329 Difficulty: Medium AACSB: Analytic Skills
4. Wal-Mart is perhaps one of the best illustrations of the threat of ________ found in Porter’s model. a. intense segment rivalry b. new entrants c. substitute products d. buyers’ growing bargaining power e. suppliers’ growing bargaining power
Answer: d Page: 329 Difficulty: Hard AACSB: Reflective Thinking
5. A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied. Which of the following is the best illustration of the threat of suppliers’ growing bargaining power? a. Wal-Mart has almost no competitors in its marketspace. b. Oil companies must purchase a significant amount of their
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment. Which of the following would NOT be among Porter’s five forces? a. Industry competitors b. Technological partners c. Substitutes d. Buyers e. Potential entrants
Answer: b Page: 328 Difficulty: Medium
2. When entry and exit barriers are high, ________. a. profit potential is high, but firms face more risk because poorer-performing firms stay in and fight it out b. firms easily enter and leave the industry, and returns are stable and low c. few new firms can enter the industry, and poorly performing firms can easily exit d. firms enter during good times but find it hard to leave during bad times, resulting in chronic overcapacity and depressed earnings for all e. none of the above
Answer: a Page: 328 Difficulty: Medium AACSB: Analytic Skills
3. A segment is unattractive when there are actual or potential ________ for the product. a. contenders b. competitors c. substitutes d. unclear demand e. profit fluctuation
Answer: c Page: 329 Difficulty: Medium AACSB: Analytic Skills
4. Wal-Mart is perhaps one of the best illustrations of the threat of ________ found in Porter’s model. a. intense segment rivalry b. new entrants c. substitute products d. buyers’ growing bargaining power e. suppliers’ growing bargaining power
Answer: d Page: 329 Difficulty: Hard AACSB: Reflective Thinking
5. A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied. Which of the following is the best illustration of the threat of suppliers’ growing bargaining power? a. Wal-Mart has almost no competitors in its marketspace. b. Oil companies must purchase a significant amount of their