Reading 41: Competitive Strategy: The Core Concepts - LOS

答案和详解如下：

1.The choice of competitive strategy is driven by two fundamental questions. These fundamental questions involve:

A)   industry attractiveness and competitive advantage.

B)   industry attractiveness and profitability.

C)   competitive advantage and the number of competitors.

D)   competitive advantage and industry growth.

The correct answer was A)

According to Porter, the two key questions in determining a competitive strategy involve industry attractiveness and competitive advantage.

2.According to Porter, there are two fundamental questions that determine competitive strategy. Of these two questions, the one that the firm has the most control over is whether the:

A)   industry is attractive.

B)   firm's competitors will enter the market.

C)   industry is profitable.

D)   firm can position itself to have a competitive advantage.

The correct answer was D)

The firm typically has little control over the industry’s long-term attractiveness, but it has a great deal of control over its choice of competitive position.

3.With respect to industry attractiveness, the key concern is whether the:

A)   industry is currently profitable.

B)   industry is currently experiencing significant sales growth.

C)   industry is attractive in terms of long-term profit potential.

D)   firm is currently profitable.

The correct answer was C)

The key concern of industry attractiveness is whether the industry is attractive in terms of long-term profit potential.

4.Which of the following are likely to result in higher profitability for a firm in a competitive industry?

A)   High supplier concentration, low buyer concentration, and low barriers to entry.

B)   Low supplier concentration, low buyer concentration, and commoditization of the industry’s products.

C)   Product differentiation, low switching costs, and high barriers to exit.

D)   High barriers to entry, low barriers to exit, and high switching costs.

The correct answer was D)    

All else equal, high barriers to entry, low barriers to exit, and high switching costs will tend to result in higher profitability for a firm in a competitive industry.

5.Mary Moore is preparing a report on the commercial banking industry. As she gleaned information from the competitors annual reports she encountered the following statements in the CEO’s letters to their shareholders and the Management Discussion and Analysis (MD & A) section:

William Spencer, CEO of Western Banks, stated in the MD&A:

§ “Consolidation within the industry will continue at its current pace, or perhaps accelerate, as banking concerns seek to increase their presence and market share.”

Margaret Acosta, CEO of Southwest Banking, stated in her letter to the shareholders:

§ “Competition is becoming increasingly diverse as banks continue to increase in size and offer products ranging from insurance and mutual funds to high tech interaction with customers.”

Roy Stanley, Jr., President of GlobalBank Inc, indicated in his letter to the shareholders that:

§ “The banking industry has yet to figure out how to attract customers from non-bank rivals in the non-traditional banking categories. For example, our mutual fund offerings still have not performed as well as we would have liked and it seems that at times we have lost customers to traditional mutual fund families at the drop of a hat.”

Maria Bellini, CEO of Atlantic Mercantile Banks, noted in the MD&A that:

§ “Cost advantages in most traditional banking activities seem to be mostly gone now, which will impact the industry future profitability.”

Moore is most likely to report that the commercial banking industry has high rivalry among competitors based on:

A)   statements 1 and 2.

B)   statements 1 and 4.

C)   statements 2 and 3.

D)   statements 2 and 4.

The correct answer was B)

Statements 1 and 4 support arguments for rivalry among commercial banks in that they indicate that banks must increase market share through mergers and acquisitions and that traditional banking activities are now commodities. Statement 2 suggests that banks are offering increasingly diverse products in an attempt to differentiate – the opposite of a commodity-type business. Statement 3 suggests that switching costs for customers are relatively low.

6.While Joseph Donovan, CFA, was interviewing Gene Hickman, the CEO of Hickman Supply, Hickman made the following comments on the auto supply industry:

1.  Auto manufacturers are relying on Tier 1 suppliers for more and more sub-assembly work and quality control and testing.

2.  The additional subassembly work facilitates specialization among suppliers and allows them to resell their expertise to other auto manufacturers.

3.  The additional subassembly work requires additional capital investment and risk taking by the suppliers.

4.  Auto manufacturers expect price cuts in exchange for the additional sub-assembly work.

Given these statements, Donovan is most likely to conclude that barriers to entry to the auto supply industry have increased due to:

A)   statements 1 and 3.

B)   statements 1 and 2.

C)   statements 2 and 4.

D)   statements 2 and 3.

The correct answer was D)

Based on the Porter model, increased specialization and an increase in capital investment may each act to increase barriers to entry. The fact that auto manufacturers are relying more and more on their suppliers may be interpreted as an industry dynamic that would attract more competition. Finally, the negotiation for lower prices by auto manufacturers suggests that suppliers are losing some bargaining power.