Chapter 11: Dealing with Competition
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. Michael Porter has identified five forces that determine the intrinsic long-run
attractiveness of a market or market segment. Which of the following would NOT be
among Porter’s five forces?
a. Industry competitors
b. Technological partners
c. Substitutes
d. Buyers
e. Potential entrants
Answer: b Page: 342 Level of difficulty: Medium
2. Which of the following would be the most likely threat that is associated with
potential new entrants in Porter’s segment structural attractiveness model?
a. Threat of positioning
b. Threat of response
c. Threat of delayed action
d. Threat of role reversal
e. Threat of mobility
Answer: e Page: 342 Level of difficulty: Hard
3. A segment is unattractive when there are actual or potential ________ for the product.
a. contenders
b. competitors
c. substitutes
d. unclear demand
e. profit fluctuation
Answer: c Page: 343 Level of difficulty: Medium
4. Wal-Mart is perhaps one of the best illustrations of the threat of ________ found in
Porter’s model.
a. intense segment rivalry
b. new entrants
c. substitute products
d. buyers’ growing bargaining power
e. suppliers’ growing bargaining power
Answer: d Page: 343 Level of difficulty: Hard
5. A segment is unattractive if the company’s suppliers are able to raise prices or reduce
quantity supplied. Which of the following is the best illustration of the threat of
suppliers’ growing bargaining power?
a. Wal-Mart has almost no competitors in its market space.
b. Oil companies must purchase a significant amount of their product from OPEC.
c. McDonald’s is the largest fast food franchise and is still growing.
d. The U.S. Post Office has merged package operations with FedEx.
e. Sears unsuccessfully attempted to compete with Wal-Mart and Kmart.
Answer: b Page: 343 Level of difficulty: Hard
6. A(n) ________ is a group of firms that offer a product or class of products that are
close substitutes for one another.
a. industry
b. cartel
c. cooperative
d. monopoly
e. demand field
