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

2. Which of the following would be the most likely threat that is associated with potential new entrants in Porter’s segment structural attractiveness model?

a. Threat of positioning

b. Threat of response

c. Threat of delayed action

d. Threat of role reversal

e. Threat of mobility

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

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

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 market space.

b. Oil companies must purchase a significant amount of their product from OPEC.

c. McDonald’s is the largest fast food franchise and is still growing.

d. The U.S. Post Office has merged package operations with FedEx.

e. Sears unsuccessfully attempted to compete with Wal-Mart and Kmart.

6. A(n) ________ is a group of firms that offer a product or class of products that are close substitutes for one another.

a. industry

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