Question: A customer purchasing a mobile phone for personal use has buying power than when purchasing mobile phones for __. more, their family Less, a large team at a Fortune 500 company More, a sales team at a Fortune 500…
Question: The barriers to entry in a capital-intensive industry such as airlines or petroleum are higher because… The market for the good is very large Acquired capital can be easily redeployed for use in other industries Capital investments cannot be…
Question: Which of the following is a deterrent to entry into an industry? The absence of learning curves in the industry Minimum efficient scale is relatively unimportant Incumbent firms are not aggressive Excess capacity within the industry Answers: Excess capacity…
Question: How might an analyst use the environmental analysis tool? To understand and evaluate current or potential competitors To understand the broad societal forces that impact a firm To test a strategic position To understand a firm’s competitive strengths Answers:…
Question: A pharmaceutical company is issued a patent on a powerful new arthritis medication. What impact might that patent have on its profitability in the pharmaceutical industry? A patent likely will have little impact on the firm’s profitability. A patent…
Question: Would you complete a SWOT, competitor or environmental analysis to understand at the broadest level a firm’s internal capabilities and its external competitive environment? SWOT analysis Competitor analysis Environmental analysis Answers: SWOT analysis Conclusion of Would you complete a…
Question: When is a firm more likely to earn higher profits? There are barriers to entry or imitation The firm’s key resources and capabilities are easily imitated A firm and its rivals produces similarly designed products as that of a…
Question: Which of the following best describes who conducts a strategic analysis? Strategic analyses are performed within a company by leadership and other employees. Strategic analysts could be a wide variety of individuals within or associated with a firm as…
Question: Why do strategy analysts care about economic profits and not just accounting profits? Economic profits reflect the opportunity cost of deploying capital. Economic profits calculate a firm’s profits after operating costs. Economic profits are the same as accounting profits.…
Question: Which of the following cases BEST illustrates the generation of rents/economic profits? A firm has higher returns than an established, less risky competitor A firm has the greatest market share in its industry A firm has higher returns than…
