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Question 1

Porter's Five Forces framework is based on the principle of:

a) Resource-based view

b) Conduct - structure - performance

c) Structure - conduct - performance

d) Econometrics

Question 2

In Porter's Five Forces, the 'threat of new entrants' relates to:

a) Barriers to entry

b) Substitutes

c) Switching costs

d) Buyer power

Question 3

Brandenburg and Nalebuff added a sixth force to Porter's Five Forces. It is known as:

a) Substitutes

b) Complementors

c) Seller power

d) Government regulation

Question 4

'Co-opetition' as suggested by Brandenburger and Nalebuff (1997) can be defined as:

a) Competitive behaviour that combines competition and cooperation

b) Competitive behaviour that is good for society

c) Collaboration

d) The acquisition of rivals

Question 5

The 'positioning' approach to strategy holds the view that:

a) Strategy is about how a firm positions itself in relation to the industry structure

b) Strategy is about how firms respond to macro-environmental changes

c) Strategy is about how firms deal with their stakeholders

d) Strategy is about how firms position themselves in relation to competitors

Question 6

Barriers to entry into an industry are likely to be high if:

a) Switching costs are low

b) Differentiation is low

c) Requirement for economies of scale is high

d) Access to distribution channels is high

Question 7

Buyer power is high if:

a) Differentiation is low

b) Switching costs are low

c) They have little information

d) The buyer requires a high quality product for their own production

Question 8

Supplier power will be high if:

a) The supplier's product is easy to understand

b) There are many suppliers to chose from

c) There is a threat of forward integration

d) The supplier's product is undifferentiated

Question 9

A substitute product or service is:

a) A competitor's product or service

b) An alternative way of meeting the same need

c) A new entrant into the industry

d) A less attractive way of meeting the same need

Question 10

Competitive rivalry will be high if:

a) The industry is fragmented

b) There are a few strong players in the industry

c) There is a high degree of differentiation

d) The industry is in its infancy

Question 11

Porter's Five Forces assumes a 'zero-sum game'. A 'zero-sum game' means:

a) Firm A wins at the expense of Firm B

b) Firm A and Firm B both win

c) No firm wins

d) Some industries will win at the expense of other industries.

Question 12

An industry characterized by irregular patterns of stability, rapid technological change, high uncertainty and global competition can be described as:

a) Hypercompetitive

b) Hyperactive

c) Atypical

d) Co-opetitive

Question 13

The 'value-net' as developed by Brandenburger and Nalebuff (1996) can be defined as:

a) The way in which an organization is linked to its supply chain

b) The way in which the different activities of the organization are linked together to add value

c) The relationship between organizations interacting in the same game

d) The way in which the organization produces value for the customer

Question 14

A strategic group can be defined as:

a) A group of key resources and competences that are necessary to achieve competitive advantage

b) A group of customers that have similar characteristics

c) An industry recipe

d) A group of firms in an industry following the same or a similar strategy

Question 15

Strategic group analysis involves mapping organizations using:

a) Two variables appropriate to the industry

b) Three variables appropriate to the industry

c) Two variables which stay the same regardless of the industry

d) Three variables which stay the same regardless of the industry

Oxford University Press, Online Resource Centre, Chapter 03.

Chapter 03

Instructions