Multiple Choice

What is the main purpose of conducting an industry environment analysis?

to understand government regulations

Which of the following is a key player in the industry environment?

competitors

What stage of industry life cycle is characterized by intense competition and excess capacity?

shakeout stage

A buyer establishes its own manufacturing facility. This is an example of:

forward integration

Which factor strengthens the bargaining power of suppliers?

few suppliers with high sales volume

What step comes first in conducting an industry environment analysis?

define industry boundaries

A rivalry is considered weak when:

products are highly differentiated

Who are individuals or institutions that lend money for interest to businesses?

creditors

Which of the following is not a factor of the "Threat of Substitute Products"

high switching cost

In the growth industry stage, companies typically experience:

increasing competition and rapid

customer growth

Which of the following best describes the industry environment?

environment involving social and political changes

Who is considered the "backbone" of the business, responsible for goods or service delivery?

employees

What stage in the industry life cycle is marked by saturated markets and slow growth?

mature

Which of the following reflects strong rivalry among competing firms?

aggressive price wars and performance improvements

Which is not a factor that strengthens the threat of new entrants?

high product differentiation

A soft drink company faces competition from bottled water and juices. This is an example of:

substitute products

When a supplier also owns a retail outlet, it is an example of:

forward integration

What is the final step in conducting industry environment analysis?

position of the company in the industry

In what rivalry level do companies still earn profits while pushing each other to innovate?

fierce rivalry

What term refers to new businesses entering a market with the goal of gaining market share?

new entrant