BUS 401 Chapter 2 || Already Graded A+.
Firms external environment provides both correct answers opportunities: ways of taking
advantage of conditions in the environment to become more profitable
threats: conditions in the competitive environment that endanger the profitability of the firm
one key threat a strategist must understand and cope with correct answers competition
managers often define competition too correct answers narrowly, as though it only occurs among
today's competitors
The five forces that shape all industry attractiveness and profitability correct answers customers
suppliers
potential entrants
substitute products
competition (for profits)
T/F: the principles that determine underlying drivers of profitability are the same across all
industries correct answers T
First strategic decision a firm must make correct answers Select the industry/market in which it
will compete
A firm's landscape is defined by correct answers the industry in which a firm competes
the product and geographic markets within that industry that the firm targets
How does the US gov define industries? correct answers North American Industry Classification
System (NAICS)
Vary from 2-7 digits
, What does taking a customer-oriented view entail? correct answers Firms thinking about the job
their products do for customers (what customer need does the product fill) instead of identifying
the industry based on the product/service they produce
T/F: Two firms have products that do the same job for customers (meet similar customer needs)
are part of the same industry correct answers T
Five forces that shape the profit-making potential of the average firm in an industry (Porters 5
forces) correct answers Rivalry
Buyer Power
Supplier Power
Threat of new Entrants
Threat of substitute products
Rivalry correct answers Competition among firms within an industry. Typically involves firms
putting pressure on each other and limiting each other's profit potential by attempting to gain
profits and/or market share
Substitute correct answers A product that is fundamentally different yet serves the same
function/purpose as another product
threats correct answers conditions in the competitive environment that endanger the profitability
of a firm
opportunities correct answers ways of taking advantage of conditions in the environment to
become more profitable
attractiveness of the industry correct answers the degree to which an average firm in the industry
can earn good profits (the profit potential for an average firm)
Firms external environment provides both correct answers opportunities: ways of taking
advantage of conditions in the environment to become more profitable
threats: conditions in the competitive environment that endanger the profitability of the firm
one key threat a strategist must understand and cope with correct answers competition
managers often define competition too correct answers narrowly, as though it only occurs among
today's competitors
The five forces that shape all industry attractiveness and profitability correct answers customers
suppliers
potential entrants
substitute products
competition (for profits)
T/F: the principles that determine underlying drivers of profitability are the same across all
industries correct answers T
First strategic decision a firm must make correct answers Select the industry/market in which it
will compete
A firm's landscape is defined by correct answers the industry in which a firm competes
the product and geographic markets within that industry that the firm targets
How does the US gov define industries? correct answers North American Industry Classification
System (NAICS)
Vary from 2-7 digits
, What does taking a customer-oriented view entail? correct answers Firms thinking about the job
their products do for customers (what customer need does the product fill) instead of identifying
the industry based on the product/service they produce
T/F: Two firms have products that do the same job for customers (meet similar customer needs)
are part of the same industry correct answers T
Five forces that shape the profit-making potential of the average firm in an industry (Porters 5
forces) correct answers Rivalry
Buyer Power
Supplier Power
Threat of new Entrants
Threat of substitute products
Rivalry correct answers Competition among firms within an industry. Typically involves firms
putting pressure on each other and limiting each other's profit potential by attempting to gain
profits and/or market share
Substitute correct answers A product that is fundamentally different yet serves the same
function/purpose as another product
threats correct answers conditions in the competitive environment that endanger the profitability
of a firm
opportunities correct answers ways of taking advantage of conditions in the environment to
become more profitable
attractiveness of the industry correct answers the degree to which an average firm in the industry
can earn good profits (the profit potential for an average firm)
