Ch 2 Review Questions

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BUS497ABH Spring 09 Chapter 2 Review Questions | | | | |There is only ONE correct answer for each question. | True/False: 1. The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration. 2. Buyer power tends to be higher if suppliers provide undifferentiated or standard products. 3. Porter's five forces model helps to determine both the nature of competition in an industry and the industry's profit potential. 4. If all of Porter's five competitive forces for an industry are weak (low), then established companies in the industry have the potential to raise prices and earn higher returns. 5. Competition tends to be more intense among firms within a strategic group than between strategic groups. 7. A strategic group is made up of firms from different industries whose products may be substitutes for each other. 8. Conditions in the general segment of the environment have the least direct impact on the success of a firm’s strategy. 9. The same environmental trend can often have very different effects on firms within the same industry. 10. In some industries, high switching costs can act as an important barrier to entry. 11. Organization inertia allows managers to make frequent changes to keep strategy aligned with the environment. Multiple Choice. 9. Environmental forecasting involves developing plausible projections about the _____ of environmental change. A. direction B. scope C. speed D. all of the above E. A & B only 10. Which of the following would be considered a factor in the general
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