Mqm 385 Chapter 2

Front 1

Groupof companies offering products or services that are close substitutes for eachother.

Back 1

Industry

Front 2

An example of an industry and its competitors.

Back 2

Computer Hardware device industry:

1. HP

2. Apple

3. Dell

4. Microsoft

5. Lenovo

Front 3

External analysis begins by ________

Back 3

identifying the industry within which a company competes.

Front 4

______________ defines an industries boundaries.

Back 4

The basic customer needs that are served by a market.

Front 5

What is a sector?

Back 5

Groupof closely related industries.

Front 6

Market segments are distinctgroups of customers within a market that can be differentiated on the basis oftheir: ________

Back 6

1. individual attributes

2. specific demands

Front 7

What is an example of a sector, and corresponding industries?

Back 7

Computer Sector:

1. Computer Component Industry

2. Computer Hardware Industry

Computer Software Industry

Front 8

Name the "barriers to entry" within the Force 1:

Back 8

Economies of Scale
Brand loyalty
Absolute Cost Advantage
Customer Switching Costs
Government Regulations

Front 9

What 4 factors have a major impact on the intensity of rivalry among established companies within an industry?

Force 2

Back 9

1. Industry Competitive Structure

2. Industry Demand

3. Cost Conditioners

4. Exit Barriers

Front 10

What does the Industry Competitive Structure refer to?

Back 10

the number and size distribution of companies in an industry.

Front 11

What is a fragmented industry structure? example?

Back 11

Consists of a large number of small to medium sized companies, none of which are in a position to determine industry price.

Agriculture, Dry Cleaning, Restaurants, health clubs.

Front 12

What is a consolidated industry? examples?

Back 12

Dominated by a small number of large companies (oligopoly), or in extreme cases by just one company (monopoly), and such companies often are in a position to determine industry prices.

Aerospace, Soft Drink, Wireless Service

Front 13

Industry Demand (Force 2)

When demand is stagnating or declining, a company can grow only by _________?

Example?

Back 13

taking market share from its rivals.

Price Cuts in the telecommunications industry.

Front 14

Common Exit Barriers include:

Back 14

1. Investments in Assets that are little to no value in alternative uses.

2. High Fixed Costs of Exit - (Pensions, Severance Pay)

3. Emotional Attachments to Industry

4. Economic Dependence

5. Bankruptcy Regulations

Front 15

When are buyers most powerful? (Force 3)

Back 15

1. When Buyers have Choice.

2. When Buyers purchase in large.

3. When the Supply industry depends upon buyers for a large % of its total orders.

4. When switching costs are low, and buyers can pit supplying companies against each other to lower prices.

5. When buyers can threaten to enter the industry and independently produce the product.

Front 16

What is a an example of when buyers are most powerful?

Back 16

The automobile component supply industry, whose buyers are large manufacturers such as GM, Ford, Honda.

Front 17

Suppliers are most powerful when (Force 4)?

Back 17

1. The product that suppliers sell has few substitutes and is vital to companies in the industry.

2. The profitability of suppliers is not significantly affected by the purchases of companies in a particular industry.

3. Companies in an industry would experience significant switching costs.

4. Suppliers can threaten to enter their customers industry.

5. Companies in the industry cannot threaten to enter the suppliers industry.

Front 18

What is a an example of when suppliers are most powerful?

Back 18

PC industry - Intel

Front 19

Describe an example of substitute products (force 5).

Back 19

Companies in the coffee industry compete in directly with those in the tea and soft drink industries because all three serve customer needs for nonalcoholic drinks, caffeinated drinks.

Front 20

What is an example of a complementor (force 6)?

Back 20

The complementor to the PC industry are the companies that make software applications.

Front 21

Describe an example of strategic groups in an industry.

Back 21

Aerospace Industry

1. Manufacturers of Regional Jets (Bombardier & Embraer).

2. Manufacturer of large commercial jets (Boeing & Airbus).

Front 22

Factors that form strategic group within industries include:

Back 22

1. distribution channels

2. Market Segments

3. Quality of Products

4. Customer Service

Front 23

A company's closest competitors are __________

Back 23

those in its strategic group.

Example Wal-Mart and Target, not Walmart and Nordstrom.

Front 24

Implications of strategic groups involve _______ (2)

Back 24

1. Sinceall companies in a strategic group pursue a similar strategy: customersview them as direct substitutes for each other.

2. Different strategic groups have different relationships to each of thecompetitive forces.

Front 25

___________ are factors that inhibit the movement of companies between strategic groups.

Back 25

Mobility Barriers

Front 26

When it comes to mobility barriers, managers must ________ (2).

Back 26

1. determineif it is cost-effective to overcome mobility barriers.

2. realizethat companies in other strategic groups become their competitors if theyovercome mobility barriers.