MGMT 4513 MIDTERM COMPREHENSIVE
REVIEW 2026 FULL QUESTIONS AND
VERIFIED ANSWERS
◉ When applying the five forces model, the first step should ideally be:
a. drawing a strategic group map.
b. assessing the overall strength of five forces.
c. calculating the average margins in the industry.
d. defining the relevant industry. Answer: d. defining the relevant
industry.
◉ ___________ are best described as decreases in cost per unit as
output increases.
a. Economies of scale
b. Economies of scope
c. Time compression economies
d. Economies of replication Answer: a. Economies of scale
◉ Which of the following statements about industry analysis is NOT
true?
,a. Industry refers to a set of firms providing a similar product or service.
b. Industry is a nested concept.
c. Industry analysis is theoretically grounded upon resource-based view.
d. Porter's five forces framework is widely used for industry analysis.
Answer: c. Industry analysis is theoretically grounded upon resource-
based view.
◉ Value chain analysis consists of systematically analyzing a firm's key
activities that for analysis purposes are categorized into two groups:
a. primary activities and support activities.
b. products and service activities.
c. customers and suppliers.
d. profits and losses. Answer: a. primary activities and support activities.
◉ Which of the following factors best describes the U.S. automotive
industry being characterized by high entry barriers?
a. New auto companies create electric cars powered by simpler motors
and gearboxes.
b. New entrants in the automotive industry expect that incumbents will
not or cannot retaliate.
c. Car manufacturers require large-scale production in order to be cost-
competitive.
, d. Many industrial products are as easy to build as cars powered by
internal combustion engines. Answer: c. Car manufacturers require
large-scale production in order to be cost-competitive.
◉ The primary objective of Porter's five forces framework is to:
a. replace a firm's competitive advantage with competitive parity.
b. explain and predict the potential profitability of an industry.
c. reduce the gap between the value of a firm's product and its cost of
production.
d. break down a firm's value chain activities into primary and support.
Answer: b. explain and predict the potential profitability of an industry.
◉ Generally, perfectly competitive industries such as paper and steel
(commodities) are deemed to be ________ in profits to more
differentiated industries like pharmaceuticals and cosmetics.
a. superior
b. inferior
c. similar
d. indeterminate Answer: b. inferior
◉ Which of the following tends to increase rivalry intensity of an
industry?
REVIEW 2026 FULL QUESTIONS AND
VERIFIED ANSWERS
◉ When applying the five forces model, the first step should ideally be:
a. drawing a strategic group map.
b. assessing the overall strength of five forces.
c. calculating the average margins in the industry.
d. defining the relevant industry. Answer: d. defining the relevant
industry.
◉ ___________ are best described as decreases in cost per unit as
output increases.
a. Economies of scale
b. Economies of scope
c. Time compression economies
d. Economies of replication Answer: a. Economies of scale
◉ Which of the following statements about industry analysis is NOT
true?
,a. Industry refers to a set of firms providing a similar product or service.
b. Industry is a nested concept.
c. Industry analysis is theoretically grounded upon resource-based view.
d. Porter's five forces framework is widely used for industry analysis.
Answer: c. Industry analysis is theoretically grounded upon resource-
based view.
◉ Value chain analysis consists of systematically analyzing a firm's key
activities that for analysis purposes are categorized into two groups:
a. primary activities and support activities.
b. products and service activities.
c. customers and suppliers.
d. profits and losses. Answer: a. primary activities and support activities.
◉ Which of the following factors best describes the U.S. automotive
industry being characterized by high entry barriers?
a. New auto companies create electric cars powered by simpler motors
and gearboxes.
b. New entrants in the automotive industry expect that incumbents will
not or cannot retaliate.
c. Car manufacturers require large-scale production in order to be cost-
competitive.
, d. Many industrial products are as easy to build as cars powered by
internal combustion engines. Answer: c. Car manufacturers require
large-scale production in order to be cost-competitive.
◉ The primary objective of Porter's five forces framework is to:
a. replace a firm's competitive advantage with competitive parity.
b. explain and predict the potential profitability of an industry.
c. reduce the gap between the value of a firm's product and its cost of
production.
d. break down a firm's value chain activities into primary and support.
Answer: b. explain and predict the potential profitability of an industry.
◉ Generally, perfectly competitive industries such as paper and steel
(commodities) are deemed to be ________ in profits to more
differentiated industries like pharmaceuticals and cosmetics.
a. superior
b. inferior
c. similar
d. indeterminate Answer: b. inferior
◉ Which of the following tends to increase rivalry intensity of an
industry?
