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The Five Competitive Forces That Shape Strategy


Quiz Questions

1. To neutralize supplier power, standardize specifications for parts so your company can switch more easily among vendors.
True
False
2. To counter customer power, ________________ your services so it’s harder for customers to leave you.
Expand
Reduce
3. To temper price wars initiated by established rivals, invest more heavily in products ______________ competitor’s offerings
Similar to
That differs significantly from
4. To scare off new entrants, elevate the fixed costs of competing; for instance, by ____________ your R&D expenditures.
Escalating
Lowering
5. To limit the threat of substitutes, offer better value through _____________ product accessibility.
Wider
Smaller
6. Industry structure drives competition and profitability, not weather an industry is emerging or mature, high tech or low tech, regulated or unregulated.
True
False
7. Rivalry is especially _______________ to profitability if it gravitates solely to price because price competition transfers profits directly from an industry to its customers.
destructive
needed
8. Eliminating rivals is a _______________ strategy. A profit windfall from removing todays’ competitors often attracts new competitors and backlash from customers and suppliers.
risky
good
9. The boundaries of an industry
consist of two primary dimensions, the scope of products or services and geographic scope.
limitless
10. Using the five forces frame work, creative strategists may be able to spot an industry with a good future before this good future is reflected in the price of acquisition candidates
True
False