7/4/25, 9:56
PM
LSUS MBA 705 Exam questions and answers with
complete solutions verified latest update 2025/2026
Terms in this set (66)
Macro-environmental Consists of the set of external conditions and forces
Factors that can influence organizations
Focus of macro- At this analysis stage, focus is on the industry, not
environmental factors individual firms.
PESTEL Framework Political
Limitations of the Five Relationships among the rivals in an industry are
Forces Model always described as adversarial.
One of the Five Forces Threat of Substitute Products or Services
Power of Buyers is High There are a few buyers and each buyer purchases large
When quantities
Bargaining Power of If buyers have greater leverage over the firms in
Buyers an industry, the firm may be forced to reduce
the prices of their goods & services, thereby
reducing their profits.
Threat of New Entrants Describes the risk of potential competitors entering the
industry
Limitations of the Five Assumes that competition is a zero-sum game
Forces Model (amount of profit potential in an industry is
fixed)
Backward Integration Occurs when a buyer moves upstream in the
industry value chain into the seller's business.
1/
5
, 7/4/25, 9:56
PM
A Supplier Group if It is dominated by a few companies or is more
Powerful If concentrated than the industry that it supplies.
Power of Buyers is High Industry's products are standardized or undifferentiated
When commodities.
PESTEL Framework Legal
Political Factors Results from the processes and actions of
government bodies that can influence the
decisions and behaviors of firms.
Example of Political Tax policies
Factor
Threat of Substitute When substitutes meet the same basic customer
Products or Services needs as the industry's products but in a
different way.
Example of Political Changes in trade restrictions
Factor
Bargaining Power of When this is high, suppliers increase their prices. Thus,
Suppliers firms face higher costs.
Bargaining Power of Can threaten to backwardly integrate into the industry.
Buyers
PESTEL Framework Economic
Example of Political Tariffs
Factor
Nonmarket Strategy Lobbying, public relations, contributions, and
litigation tactics done by companies to shape
and influence political factors.
Example of Economical Gross domestic product
Factor
A Supplier Group if There is no substitute for what the supplier group
2/
5
PM
LSUS MBA 705 Exam questions and answers with
complete solutions verified latest update 2025/2026
Terms in this set (66)
Macro-environmental Consists of the set of external conditions and forces
Factors that can influence organizations
Focus of macro- At this analysis stage, focus is on the industry, not
environmental factors individual firms.
PESTEL Framework Political
Limitations of the Five Relationships among the rivals in an industry are
Forces Model always described as adversarial.
One of the Five Forces Threat of Substitute Products or Services
Power of Buyers is High There are a few buyers and each buyer purchases large
When quantities
Bargaining Power of If buyers have greater leverage over the firms in
Buyers an industry, the firm may be forced to reduce
the prices of their goods & services, thereby
reducing their profits.
Threat of New Entrants Describes the risk of potential competitors entering the
industry
Limitations of the Five Assumes that competition is a zero-sum game
Forces Model (amount of profit potential in an industry is
fixed)
Backward Integration Occurs when a buyer moves upstream in the
industry value chain into the seller's business.
1/
5
, 7/4/25, 9:56
PM
A Supplier Group if It is dominated by a few companies or is more
Powerful If concentrated than the industry that it supplies.
Power of Buyers is High Industry's products are standardized or undifferentiated
When commodities.
PESTEL Framework Legal
Political Factors Results from the processes and actions of
government bodies that can influence the
decisions and behaviors of firms.
Example of Political Tax policies
Factor
Threat of Substitute When substitutes meet the same basic customer
Products or Services needs as the industry's products but in a
different way.
Example of Political Changes in trade restrictions
Factor
Bargaining Power of When this is high, suppliers increase their prices. Thus,
Suppliers firms face higher costs.
Bargaining Power of Can threaten to backwardly integrate into the industry.
Buyers
PESTEL Framework Economic
Example of Political Tariffs
Factor
Nonmarket Strategy Lobbying, public relations, contributions, and
litigation tactics done by companies to shape
and influence political factors.
Example of Economical Gross domestic product
Factor
A Supplier Group if There is no substitute for what the supplier group
2/
5
