66) Which of the following is not generally a “driving force” capable of producing fundamental
changes in industry and competitive conditions?
A) changes in the long-term industry growth rate
B) increasing globalization of the industry
C) product innovation and technological change
D) movement in the economy and in interest rates
E) regulatory influences and government policy changes
67) Which of the following is most unlikely to qualify as driving forces?
A) changes in the long-term industry growth rate, the entry or exit of major firms, and changes in
cost and efficiency
B) increasing globalization of the industry and product innovation
C) new Internet technology applications, new government regulations, and significant changes in
government policy toward the industry
D) increasing efforts to collaborate with suppliers via strategic alliances and partnerships,
escalating risk levels and normalization of cost and efficiency in the industry
E) marketing innovations and changes in who buys the industry’s product and how they use it
68) Which of the following does not qualify as potential driving forces capable of inducing
fundamental changes in industry and competitive conditions?
A) changes in who buys the product and how they use it, and changes in the long-term industry
growth rate
B) changes brought about by the entry or exit of major firms, product innovation, and marketing
innovation and cost efficiency
C) changes in the economic power and bargaining leverage of customers and suppliers, growing
supplier-seller collaboration, and growing buyer-seller collaboration
D) changes in buyer preferences for differentiated products instead of mostly standardized or
identical products
E) changes in economies of scale and experience curve effects brought on by changes in
manufacturing technology and new Internet capabilities
69) Which of the following is most. likely to qualify as a driving force?
A) increases in price cutting by rival sellers and the launch of major new advertising campaigns
by one or more rivals
B) successful introduction of innovative new products or new ways to market products
C) an increase in the prices of substitute products
D) decisions on the part of industry’s three biggest competitors not to pursue a strategy of
striving to be the industry’s low-cost leader
E) decisions by one or more outsiders not to attempt to enter the industry
70) Which of the following is not a common type of driving force?
A) reductions in uncertainty and business risk
B) changing societal concerns, attitudes, and lifestyles
C) diffusion of technical know-how across companies and countries
D) increasing efforts to collaborate closely with suppliers
E) advances in technology and manufacturing process innovation
71) Increasing globalization of the ride-share industry can be a driving force because
A) the services provided by foreign ride-share competitors are nearly always cheaper or of better
quality than those of domestic companies.
B) foreign ride-share operators typically have lower costs, more technological expertise, and
greater social network integration capabilities than domestic firms.
C) ride-share companies need to spread their operating reach into more and more country
markets to meet emerging consumer demand and take advantage of available operating
opportunities.
D) it results in ride-share companies having fewer competitors and a strategic group map with
fewer circles.
E) market growth rates rise, product innovation accelerates, and new ride-share startups are
increasingly likely to enter the industry.
72) Driving-forces analysis helps managers identify whether
A) the collective impact of the driving forces will act to increase/decrease market demand,
increase/decrease competition, and raise/lower industry profitability in the years ahead.
B) it will become more or less important to aim the company’s strategy at being the industry’s
low-cost producer.
C) the driving forces will have a bigger impact on company profitability than competitive forces.
D) the industry is likely to become more or less vertically integrated and why.
E) competitive advantages are likely to grow or diminish in importance.
73) Evaluating the industry’s driving forces, as a whole, requires understanding their influence on
the attractiveness of industry environment and generally are
A) determined by the sizes of strategic groups and the power of rival firms’ competitive
strategies.
B) defined in ways that will strengthen or weaken market demand, competition, and industry
profitability in future years.
C) the cause of a reduction in the bargaining power of buyers.
D) triggered by movement in the economy, higher or lower interest rates, or important new
strategic alliances.
E) triggered by such factors as growing competitive pressures from substitute products, and the
efforts of rival firms to employ new or different offensive strategies.
74) In analyzing driving forces, the strategist’s role is to
A) identify the driving forces and evaluate their impact on demand for the industry’s product, the
intensity of competition, and industry profitability.
B) predict future marketing innovations and how fast the industry is likely to globalize.
C) evaluate what stage of the life cycle the industry is in and when it is likely to move to the next
stage.
D) determine who is likely to exit the industry and what changes can be expected in the
industry’s strategic group map.
E) forecast fluctuations in product demand and how buyer needs will most likely change.
75) Driving-forces analysis typically does not include
A) determining whether forces are acting to cause fundamental changes in industry conditions
and/or the industry’s competitiveness.
B) determining whether forces are acting to cause industry rivals to shift to a different strategic
group.
C) determining whether forces are acting to strengthen or weaken market demand.
D) determining whether forces are acting to make competition more or less intense.
E) determining whether forces are acting to raise or lower industry profitability.
76) The real payoff of driving forces is to help managers understand
A) what strategy changes are needed to prepare for the impacts of the driving forces.
B) the overall strength of the five competitive forces.
C) whether the industry’s strategic group map will be static or dynamic.
D) what conditions exist in the economy at large.
E) the extent to which rivals have more than two competitively valuable competencies or
capabilities.
77) Driving-forces analysis has
A) speculative value because it compels the firm to drive strategic intent and collective choice
into operating practices.
B) theoretical value because it allows managers to visualize the many different dimensions of the
preferred forces that allow for industry functionality.
C) practical value and is basic to the task of thinking strategically about where the industry is
headed and how to prepare for the changes ahead.
D) no real analytical value because the driving forces are already established in the marketplace
and it is too late to make astute and timely strategy adjustments.
E) perceived value and is associated with identifying the close and distant rivals within an
operating industry.
78) Which of the following driving forces would have the least impact on the attractiveness of
the automobile industry?
A) changes in the long-term industry growth rate
B) entry or exit of major firms
C) shifts in who buys the product and how the product is used
D) changes in costs and efficiency
E) regulatory influences and government policy changes
79) What is the best technique for revealing the different market or competitive position that
rival firms occupy in the industry?
A) strategic group mapping
B) PESTEL analysis
C) five forces framework
D) the Value Net framework
E) competitor analysis
80) A strategic group
A) consists of those industry members that are growing at about the same rate and have similar
product line breadth.
B) includes all rival firms having comparable profitability.
C) is a cluster of industry members with similar competitive approaches and market positions in
the market.
D) consists of those firms whose market shares are about the same size.
E) is made up of those firms having comparable profit margins.
81) Not all positions on a strategic group map are equally attractive because
A) small strategic groups are always less profitable than large strategic groups.
B) entry and exit barriers are different for each strategic group.
C) across-group rivalry is always weakest at the outer edge of the strategic group map.
D) industry-driving forces and competitive pressures favor some groups and disadvantage others.
E) key success factors are substantially different for differently positioned industry participants.
82) When all sellers pursue essentially identical strategies and have similar market positions
A) they remain subject to different driving forces.
B) they place about the same emphasis on various distribution channels.
C) they use the same key success factors to differentiate their products.
D) the industry can be said to contain one strategic group.
E) they still must possess customer service attributes that differentiate them from one another in
the marketplace.
83) Strategic group mapping is a visual technique for displaying
A) how many rivals are pursuing each type of strategy.
B) which companies have the biggest market share and who the industry leader really is.
C) the different market or competitive positions that rival firms occupy in an industry and for
identifying each rival’s closest competitors.
D) which companies have the highest degrees of brand loyalty.
E) which companies have failing business models.
84) Which of the following pairs of variables are least likely to be useful in drawing a strategic
group map?
A) geographic market scope and degree of vertical integration
B) brand name reputation and distribution channel emphasis
C) product quality and product-line breadth
D) level of profitability and size of market share
E) price/perceived quality and image range and the extent of buyer appeal
85) The concept of strategic groups is relevant to industry and competitive analysis because
A) firms in the same strategic groups are rarely close competitors—a firm’s closest competitors
are usually in distant strategic groups.
B) strategic group maps help identify how each competing firm is positioned and the relationship
to its closest competitors.
C) competition grows in intensity as the number and diversity of the strategic groups in an
industry increases.
D) the profit potential of firms in the same strategic group is usually very similar.
E) competitive pressures tend to be weaker within strategic groups than across strategic groups.
86) When drawing a strategic group map
A) one strategic variable and one financial variable should be used as axes for the map.
B) it is important for the variables used as axes to be highly correlated.
C) the best variables to use as axes for the map are those that identify the competitive
characteristics that delineate strategic approaches used in the industry.
D) it is important to use price as the variable for the vertical axis.
E) the primary objective is to determine which strategic groups are profitable and which are not.
87) Which of the following is not an appropriate guideline for developing a strategic group map
for a given industry?
A) The variables chosen as axes for the map should indicate important differences among rival
approaches.
B) The variables chosen as axes for the map do not have to be either quantitative or continuous.
They can be discrete variables.
C) The variables chosen as axes for the map should be highly correlated.
D) Several maps should be drawn if more than one pair of variables give different exposures to
the competitive positioning relationships present in the industry structure.
E) The sizes of the circles on the map should be drawn proportional to the combined sales of the
firms in each strategic group.
88) With the aid of a strategic group map for the pizza segment of the food service industry, one
can
A) identify easily the entry and exit barriers for each strategic group and intersegment
competition with other casual restaurants.
B) pinpoint precisely which pizza restaurants are in profitable strategic groups and which are not.
C) identify which competitive forces are strong and which are weak for pizza restaurants.
D) measure accurately whether across-group rivalry among pizza establishments is stronger than
within-group rivalry, and vice versa.
E) reveal which pizza establishments are close competitors and which are distant rivals, and that
not all positions on the map are equally attractive.
89) One of the things that can be gleaned from a strategic group map of industry rivals is
A) which rivals have been in business longer and thus have greater access to experience curve
effects.
B) which rivals have newer manufacturing facilities and thus have achieved greater product
quality.
C) which strategic groups have the highest profit margins and the highest customer switching
costs and thus represent key operating characteristics.
D) that some strategic groups are more favorably positioned than others because they confront
weaker competitive forces and/or because they are more favorably impacted by industry driving
forces.
E) which strategic groups are currently being shunned by customers because of high prices and
relatively low product quality.
90) Strategic group map analysis does not entail drawing conclusions about
A) where on the map is the best place to be and why.
B) which companies/strategic groups are destined to prosper because of their positions.
C) which companies/strategic groups seem destined to struggle.
D) what accounts for why some parts of the map are better than others.
E) where on the map is the easiest position to shift from to a more favorably situated position.
91) The payoff of good scouting reports on rivals is an improved ability to
A) anticipate what moves rivals are likely to make next.
B) determine which rivals are in the best strategic group.
C) figure out how many key success factors a rival has.
D) determine whether a rival is gaining or losing market share.
E) determine whether a rival has the best strategy and is the industry leader.
92) To succeed in predicting a competitor’s next moves, company strategists need to appraise a
rival’s
A) current strategy, financial health, market share, resources and capabilities.
B) strategic group, assumptions, resources and capabilities, financial health.
C) current strategy, assumptions, resources and capabilities, objectives.
D) market share, strategic group, driving forces, assumptions.
E) resources and capabilities, assumptions, current strategy, objectives.
93) Having good competitive intelligence about rivals’ strategies and moves to improve their
situation is important because
A) it identifies who the industry’s current market share leaders are.
B) it allows a company to anticipate what moves rivals are likely to make next and to craft its
own strategic moves with some confidence.
C) it helps identify which rival is in which strategic group.
D) it enables company managers to determine which rival has the worst strategy and how to
avoid making the same strategy mistakes.
E) it enables more accurate predictions about how long it will take a particular rival to copy most
of what the strategy leader is doing.
94) Whole Foods has invested heavily into a system for gathering competitive intelligence about
the strategic direction and likely moves of key rivals in the supermarket industry. Doing so
allows Whole Foods to determine which rivals are pursuing all of the following, except
A) the best strategy.
B) flawed or weak strategies.
C) strong performance objectives.
D) reliable resources and capabilities.
E) similar competitive approaches.
95) Angela and Jeff are co-owners of five specialty cupcake baking stores in their region. Which
of the following questions would not help them to predict the next strategic moves and
countermoves of their rivals?
A) Which mode of transport does the rival’s supplier use?
B) How does the rival manage door-to-door deliveries at no extra cost?
C) What percentage of customers frequent the rival’s store?
D) Why are the rival’s cupcakes so popular among customers?
E) How frequently does their rival fulfill special orders for custom cupcakes and how large are
those special orders?
96) A rival’s strategic moves and countermoves are
A) indicators for the visualization of strategic mapping techniques.
B) enabled and constrained by the set of capabilities they have at hand.
C) measured by the extent to which they can unveil financial objectives.
D) responses to the broader definition of the industry opportunities.
E) signs of the competitive pressures from the industry.
97) The extent to which firms are meeting objectives suggests they
A) are likely to prosper in the future.
B) are likely to continue their present strategy with only minor fine-tuning.
C) are virtually certain to make fresh strategic moves.
D) recognize the status quo as the best course of action to adopt
E) realize that refocusing will ensure competitive gains.
98) Competitive intelligence can be gleaned from
A) company press releases, company websites, management presentations, annual reports, and
10-K filings.
B) SWOT analysis, PESTLE analysis, KSF analysis, and driving forces analysis.
C) strategic group maps, Value Net analysis, and five force analysis.
D) financial ratio analysis, KSF analysis, driving forces analysis, and five forces analysis.
E) KSF analysis, Value Net analysis, and driving forces analysis.
99) The key success factors in an industry
A) are those competitive factors that most affect industry members’ abilities to prosper in the
marketplace—the particular strategy elements, product attributes, operational approaches,
resources, and competitive capabilities that spell the difference between being a strong
competitor and a weak one, and between profit and loss.
B) are determined by the industry’s driving forces, which are essential to surviving and thriving
in the industry.
C) hinge on how many different strategic groups the industry has operating within the industry
and their level of profitability and sustainable advantages.
D) depend on how many rivals are trying to move from one strategic group to another without
losing momentum.
E) are a function of such considerations as how many firms are in the industry, how many have
market shares above 5 percent, and whether the business models being used are similar or
diverse.