HPA 455 EXAM 2 QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
Five forces model definition - a framework for identifying factors affecting the degree of market
competition and the ability of established organizations to influence prices.
Five Forces Model - 1. Possibility of new entrants: the risk and increased competition associated
with the threat of new entrants
2. Threat of substitute products: increased competitiveness due to the availability or buyers
need
3. Power of suppliers: the degree of suppliers bargaining power and collaboration
4. Power of buyers: the degree of buyers bargaining power and seller buyer collaboration
5. Rivalry among competing sellers the level of competitive pressures associated with market
condition
Barriers to Entry - The degrees of threat posed by new entrants depends on present barriers to
entry
Economies of scale: - arise when the unit cost of a product or service declines as volume is
added
Switching Cost: - are real or perceived costs associated with changing a product. the higher
these cost are the more difficult it can be for customers to change
Certificate of Need - requires organizations to obtain approval from a state planning agency
before a beginning a major capital project
Group purchasing organizations (GPOs) - increase their bargaining power over suppliers by
bringing together to make group purchases from product and vendors
Exit Barriers - the costs an organization incurs from exiting a business also moderates the level
of rivalry in a market
Strategic Groups - cluster of organizations that use the same or similar strategies in an industry.
distinguished on the basis of factors such as price, quality, coverage
Organizational Rivalry Factors - Equality of organizations' strengths
Degree of product differentiation
Height of exit barriers
Different ownership types
, Rate of demand growth
Mobility Barriers - intra-industry obstacles that impede organizations in a strategic group from
joining and competing in another group
4 Industry driving forces - 1. Changes in consumer demand- consumer involved in decision
making
2. Technological changes- changing the way people interact
3. Workforce availability- shortages of healthcare personell, global problem
4. Political change-new laws on healthcare access and reimbursement requirement
Pest Analysis - Political, Economic, Social, Technological: Political factors include laws,
regulations, and governmental policies that support or hinder an organizations plans
Force Field Analysis - elaborates on PEST analysis by determining whehter the identified forces
support or undermine on organizations plans
Scenarios Analysis - stories that describe the effect environmental changes could have on an
organization if those changes came to pass
Organization capabilities - the proficiency with which it performs internal activities. Capabilities
develop from organizational learning and experience.
Core competencies - are central to fulfilling a company's mission and can place an organization
in a position of competitive advantage
Tangible resources - include land, buildings, plant, equipment and personnel
Intangible resources - consist of reputation brand name and industry knowledge
Valuable resources - must be rare difficult to imitate and lack substitutes
Internal Environmental - involves obtaining analyzing and understanding data on the internal
environment
Trend Data - portray changes from one year to the next
S.W.O.T - Strengths Weakness Opportunities and Threats
TOWS - help leaders make better strategic decisions and also links to facilitate strategy
development
Value Chain - graphical representation of key internal events an organization performs to create
stakeholder value
Five forces model definition - a framework for identifying factors affecting the degree of market
competition and the ability of established organizations to influence prices.
Five Forces Model - 1. Possibility of new entrants: the risk and increased competition associated
with the threat of new entrants
2. Threat of substitute products: increased competitiveness due to the availability or buyers
need
3. Power of suppliers: the degree of suppliers bargaining power and collaboration
4. Power of buyers: the degree of buyers bargaining power and seller buyer collaboration
5. Rivalry among competing sellers the level of competitive pressures associated with market
condition
Barriers to Entry - The degrees of threat posed by new entrants depends on present barriers to
entry
Economies of scale: - arise when the unit cost of a product or service declines as volume is
added
Switching Cost: - are real or perceived costs associated with changing a product. the higher
these cost are the more difficult it can be for customers to change
Certificate of Need - requires organizations to obtain approval from a state planning agency
before a beginning a major capital project
Group purchasing organizations (GPOs) - increase their bargaining power over suppliers by
bringing together to make group purchases from product and vendors
Exit Barriers - the costs an organization incurs from exiting a business also moderates the level
of rivalry in a market
Strategic Groups - cluster of organizations that use the same or similar strategies in an industry.
distinguished on the basis of factors such as price, quality, coverage
Organizational Rivalry Factors - Equality of organizations' strengths
Degree of product differentiation
Height of exit barriers
Different ownership types
, Rate of demand growth
Mobility Barriers - intra-industry obstacles that impede organizations in a strategic group from
joining and competing in another group
4 Industry driving forces - 1. Changes in consumer demand- consumer involved in decision
making
2. Technological changes- changing the way people interact
3. Workforce availability- shortages of healthcare personell, global problem
4. Political change-new laws on healthcare access and reimbursement requirement
Pest Analysis - Political, Economic, Social, Technological: Political factors include laws,
regulations, and governmental policies that support or hinder an organizations plans
Force Field Analysis - elaborates on PEST analysis by determining whehter the identified forces
support or undermine on organizations plans
Scenarios Analysis - stories that describe the effect environmental changes could have on an
organization if those changes came to pass
Organization capabilities - the proficiency with which it performs internal activities. Capabilities
develop from organizational learning and experience.
Core competencies - are central to fulfilling a company's mission and can place an organization
in a position of competitive advantage
Tangible resources - include land, buildings, plant, equipment and personnel
Intangible resources - consist of reputation brand name and industry knowledge
Valuable resources - must be rare difficult to imitate and lack substitutes
Internal Environmental - involves obtaining analyzing and understanding data on the internal
environment
Trend Data - portray changes from one year to the next
S.W.O.T - Strengths Weakness Opportunities and Threats
TOWS - help leaders make better strategic decisions and also links to facilitate strategy
development
Value Chain - graphical representation of key internal events an organization performs to create
stakeholder value
