MGMT 352 HOMEWORK 2 EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED
In the aircraft manufacturing industry, at least for large commercial jets, Boeing
and Airbus are the only competitors. There is not a significant threat of entry
because ____________.
entering the aircraft manufacturing industry requires huge capital investments.
Etsuro is a management consultant. Baker Corp. asks him to evaluate their
company, and he finds that the difference between the cost of producing the
firm's products and the value of those products is extremely narrow. What should
Etsuro suggest that Baker Corp. management do?
Find a way to widen the gap between cost and value.
Explanation:
Firms create economic value by expanding as much as possible the gap between the
value of the firm's product or service generates and the cost to produce it.
T/F. A consolidated industry tends to be more profitable than a fragmented one.
True
Explanation:
Since a consolidated industry tends to be more profitable than a fragmented one, firms
, have a tendency to change the industry structure in their favor, making it more
consolidated through (horizontal) mergers and acquisitions.
Frans owns Consolidated Auto Parts, a company that got its start making auto
parts related for hybrid vehicles, but her firm has had difficulty establishing itself
as a maker of parts for the more-profitable internal combustion engine. What is
most likely contributing to Consolidated's problem in this area?
Entry barriers usually protect the incumbent players in a profitable industry
Explanation:
One of the challenges that strategic leaders face is that often the most attractive
industries in terms of profitability are also the hardest to break into because they are
protected by entry barriers.
Managers at Sandburg Real Estate are surprised to hear that interest rates are
likely to remain low for the next six months. What is an implication of low interest
rates?
Consumer demand will increase
Explanation:
Low interest rates have a direct bearing on consumer demand. When credit is cheap,
consumers buy homes, cars, computers, and others on credit. You can borrow money
at lower rates, which increases economic growth
Quick Market Inc. is a food supply company that wants to sell its products
directly to consumers through mail order instead of going through supermarkets
WITH COMPLETE SOLUTIONS VERIFIED
In the aircraft manufacturing industry, at least for large commercial jets, Boeing
and Airbus are the only competitors. There is not a significant threat of entry
because ____________.
entering the aircraft manufacturing industry requires huge capital investments.
Etsuro is a management consultant. Baker Corp. asks him to evaluate their
company, and he finds that the difference between the cost of producing the
firm's products and the value of those products is extremely narrow. What should
Etsuro suggest that Baker Corp. management do?
Find a way to widen the gap between cost and value.
Explanation:
Firms create economic value by expanding as much as possible the gap between the
value of the firm's product or service generates and the cost to produce it.
T/F. A consolidated industry tends to be more profitable than a fragmented one.
True
Explanation:
Since a consolidated industry tends to be more profitable than a fragmented one, firms
, have a tendency to change the industry structure in their favor, making it more
consolidated through (horizontal) mergers and acquisitions.
Frans owns Consolidated Auto Parts, a company that got its start making auto
parts related for hybrid vehicles, but her firm has had difficulty establishing itself
as a maker of parts for the more-profitable internal combustion engine. What is
most likely contributing to Consolidated's problem in this area?
Entry barriers usually protect the incumbent players in a profitable industry
Explanation:
One of the challenges that strategic leaders face is that often the most attractive
industries in terms of profitability are also the hardest to break into because they are
protected by entry barriers.
Managers at Sandburg Real Estate are surprised to hear that interest rates are
likely to remain low for the next six months. What is an implication of low interest
rates?
Consumer demand will increase
Explanation:
Low interest rates have a direct bearing on consumer demand. When credit is cheap,
consumers buy homes, cars, computers, and others on credit. You can borrow money
at lower rates, which increases economic growth
Quick Market Inc. is a food supply company that wants to sell its products
directly to consumers through mail order instead of going through supermarkets
