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MBA 705 - MODULE 2 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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MBA 705 - MODULE 2 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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MBA 705 - MODULE 2 QUESTIONS ANDANSWERS WITH SOLUTIONS 2024
industryT-TANSWERTaTgroupTofTcompaniesTthatTproduceTcompetingTproductsTorTservices
criticalTsuccessTfactorsT(csf)T-
TANSWERTelementsTofTtheTstrategyTthatTpromoteT(butTdoTnotTguarantee)TsuccessTwithinTaTgivenTindustry;T
oftenTsharedTbyTrivals
primaryTindustryT-TANSWERTconsistsTofTaTfirm'sTmostTdirectTcompetitors
secondaryTindustryT-TANSWERTconsistsTofTaTfirm'sTlessTdirectTrivals
OutsideTsourcesTcanThelpTdefineTanTindustry,TbutTtopTmanagersTmustTmakeTtheirTownTdetermination.TTheT
oldT__TsystemTandTitsTsuccessorT(theT__)TcanTbeTusedTasTaTstartingTpoint.T-TANSWERTSIC;TNAICS
marketTshareT-
TANSWERTtheTproportionTofTindustryTsalesTattributedTtoTaTparticularTrival;TakaTtheTpercentageTofTtotalTmar
ketTsalesTattributedTtoToneTcompetitor
relativeTmarketTshareT-
TANSWERTtheTfirm'sTpercentageTofTsalesTinTanT"industry"TrestrictedTtoTselectTcompetitors;TusefulTwhenTdat
aTisTnotTreadilyTavailableTorTaTfirmTwishesTtoTfocusTonTonlyTaTsubsetTofTtheTindustry
industryTlifecycleTstagesT-TANSWERTintroduction,Tgrowth,Tshakeout,Tmaturity,Tdecline
porter'sTfiveTforcesTmodelT-
TANSWERTcenteredTaroundTexistingTrivalries;TlooksTatTbarriersTtoTentry,TbargainingTpowerTofTbuyers,Tthreat
TofTsubstitutes,TandTbargainingTpowerTofTsuppliers
whatTdoTporter'sTfiveTforcesTdetermine?T-
TANSWERTcollectively,TanTindustry'sTpotentialTforTprofitability.TbutTforcesTdoTnotTguaranteeTthatTanTindivid
ualTfirmTwillTbe/TnotTbeTprofitable
, basedTonTporter'sTfiveTforcesTmodel,TfirmsTshould...T-
TANSWERT}seekTtoTcompeteTinTindustriesTwithTaThighTpotentialTforTprofitability.TIt'sTeasierTtoTpaddleTwithTt
heTcurrentTthanTagainstTit.
intenseTcompetitionTamongTincumbentTfirmsTcanTresultTin...T-
TANSWERTpriceTwars,TadvertisingTbattles,TnewTproductTintroductionsTorTmodifications,TandTincreasedTcust
omerTserviceTorTwarranties
intensityTofTrivalryTisTmeasuredTbyT__TfactorsT-TANSWERTeight
concentrationTofTcompetitorsT(intensityTofTrivalriesTfactorT#1)T-
TANSWERTIndustriesTwithTfewTfirmsTtendTtoTbeTlessTcompetitive,TbutTthoseTwithTmanyTfirmsTthatTareTrough
lyTequivalentTinTsizeTandTpowerTtendTtoTbeTmoreTcompetitive,TasTeachTfirmTfightsTforTdominance.
highTfixedTorTstorageTcostsT(intensityTofTrivalryTfactorT#2)T-
TANSWERTFirmsTwithThighTfixedTcostsTareTmostTlikelyTtoTcutTpricesTwhenTexcessTcapacityTexistsTbecauseTthe
yTmustToperateTnearTcapacityTtoTbeTableTtoTspreadTtheirToverheadToverTmoreTunitsTofTproduction.
slowTindustryTgrowthT(intensityTofTrivalryTfactorT#3)T-
TANSWERTFirmsTinTindustriesTthatTgrowTslowlyTareTmoreTlikelyTtoTbeThighlyTcompetitiveTthanTthoseTinTfast-
growingTindustriesTbecauseToneTfirm'sTincreaseTinTmarketTshareTmustTcomeTprimarilyTatTtheTexpenseTofTriv
als.
lackTofTdifferentiationTorTlowTswitchingTcostsT(intensityTofTrivalryTfactorT#4)T-
TANSWERTTheTmoreTsimilarTtheTofferingsTamongTcompetitors,TtheTmoreTlikelyTcustomersTareTtoTshiftTfromT
oneTtoTanother.TWhenTproductsTorTservicesTareTlessTdifferentiated,TpurchaseTdecisionsTareToftenTbasedTonT
price,TtherebyTincreasingTrivalry.
switchingTcostsT-TANSWERTone-
timeTcostsTincurredTbyTbuyersTifTtheyTswitchTfromToneTcompetitorTtoTanother.TWhenTtheyTareTlow,TfirmsTar
eTunderTmoreTpressureTtoTsatisfyTcustomers.
capacityTaugmentsTinTlargeTincrementsT(intensityTofTrivalryTfactorT#5)T-
TANSWERTIfTeconomiesTofTscaleTorTotherTfactorsTdictateTthatTproductionTbeTaugmentedTinTlargeTblocks,Tthe
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