AGEC 440 Final Questions and Answers
Graded A+
Business Approach to SCP - Correct answer-strategy perspective turns SCP upside
and seeks ways to make industry less competitive
What are Porter's 5 forces? - Correct answer-based on SCP framework to assess
environmental threats or competitive market conditions
Purpose of the 5 forces - Correct answer-develop strategies to neutralize threats so
as to seek competitive advantage
assist firm manager's a framework to analyze environmental threats
Porter's 5 Forces - Correct answer-threat of new entrants
bargaining power of suppliers
bargaining power of buyers
threat of substitute products
rivalry among competing firms
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,SOCIOCULTURAL TRENDS - Correct answer-a set of beliefs shared by one
social group ex: free speech in US, ex: constitution week at tamu, ex: letter from
young about alt right group
freedom of speech - Correct answer-first amendment rights come from virginia
declaration of independence - george mason basically reworded and wrote it in the
first amendment.
TECHNOLOGICAL TRENDS - Correct answer-for tech companies freedom of
speech is good bc it means more posts, more $
GOVERNMENT/REGULATORY TRENDS - Correct answer-if govt gets
involved in moral issues ex: climate change then according to friedman, thats using
force-you can't force someone to be a good person the essence of morality is not
forced
ECONOMIC TRENDS - Correct answer-there would be a loss of social welfare
because less creativity, innovation, etc. = less business
remote environment - Correct answer-ECONOMIC TRENDS,
GOVERNMENT/REGULATORY TRENDS, TECHNOLOGICAL TRENDS,
SOCIOCULTURAL
Task Environment - Correct answer-focus of the 5 forces
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, industry analysis based on industrial organization economic (SCP)
threat of entry - Correct answer-New entrants motivated to enter and compete due
to above normal economic profits earned by existing firms
- Increases industry competition
- Reduced performance of incumbent firms
• With free entrance, performance tends to competitive levels
POTENTIAL RIVALS
Barriers to entry - Correct answer-cost of entry by new firms relative to firms
already in the market
- high cost detours entry
- determines sustainability of above normal economic profits
-protects incumbent firm's profits
8 ENTRY BARRIERS: - Correct answer-• economies of scale
• capital requirements
• access to distribution
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Graded A+
Business Approach to SCP - Correct answer-strategy perspective turns SCP upside
and seeks ways to make industry less competitive
What are Porter's 5 forces? - Correct answer-based on SCP framework to assess
environmental threats or competitive market conditions
Purpose of the 5 forces - Correct answer-develop strategies to neutralize threats so
as to seek competitive advantage
assist firm manager's a framework to analyze environmental threats
Porter's 5 Forces - Correct answer-threat of new entrants
bargaining power of suppliers
bargaining power of buyers
threat of substitute products
rivalry among competing firms
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,SOCIOCULTURAL TRENDS - Correct answer-a set of beliefs shared by one
social group ex: free speech in US, ex: constitution week at tamu, ex: letter from
young about alt right group
freedom of speech - Correct answer-first amendment rights come from virginia
declaration of independence - george mason basically reworded and wrote it in the
first amendment.
TECHNOLOGICAL TRENDS - Correct answer-for tech companies freedom of
speech is good bc it means more posts, more $
GOVERNMENT/REGULATORY TRENDS - Correct answer-if govt gets
involved in moral issues ex: climate change then according to friedman, thats using
force-you can't force someone to be a good person the essence of morality is not
forced
ECONOMIC TRENDS - Correct answer-there would be a loss of social welfare
because less creativity, innovation, etc. = less business
remote environment - Correct answer-ECONOMIC TRENDS,
GOVERNMENT/REGULATORY TRENDS, TECHNOLOGICAL TRENDS,
SOCIOCULTURAL
Task Environment - Correct answer-focus of the 5 forces
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, industry analysis based on industrial organization economic (SCP)
threat of entry - Correct answer-New entrants motivated to enter and compete due
to above normal economic profits earned by existing firms
- Increases industry competition
- Reduced performance of incumbent firms
• With free entrance, performance tends to competitive levels
POTENTIAL RIVALS
Barriers to entry - Correct answer-cost of entry by new firms relative to firms
already in the market
- high cost detours entry
- determines sustainability of above normal economic profits
-protects incumbent firm's profits
8 ENTRY BARRIERS: - Correct answer-• economies of scale
• capital requirements
• access to distribution
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
