Question

1. Which of the following is NOT one of the five forces that affect competition?

   • Threat of Economies of Scale
   • Bargaining Power of Suppliers & Buyers
   • Threat of Substitute Products and Services
   • Rivalry among Existing Competitors

2. Companies that have a Network Effect, or the ability of an increased number of people or participants to improve the value of a good or service, is an example of a threat of new entry. Which of the following companies are examples of Network effect?

   • Coca-Cola
   • Ebay
   • Pepsi
   • Salesforce

3. Which of the following are examples of barriers to entry?

   • High Capital requirements
   • government regulation
   • access to distribution channels
   • All the above
   • None of the above

4. To assess the bargaining power of suppliers, you should ask yourself how _____ is their revenue stream and how ________ is their solution

5. The power of Suppliers is greater than the power of Buyers as a competitive force?

   • True
   • False

6. YouTubeTV, NetFlix, and DirecTV are all examples of __________ to the Cable Television industry.

7. One Disadvantage of the Porter’s Five Forces Analysis is its incompatibility with conglomerate firms that have diverse sources of revenue

   • True
   • False

8. Price discounting, new product introductions, advertising campaigns and service improvements are all examples of which of the Five Forces?

   • Threat of New Entrants
   • Bargaining Power of Suppliers
   • Threat of Substitute Products and Services
   • Rivalry among Existing Competitors

Answer 1

1.

A

Economy of scale is not a threat, rather entry of new firms works as a threat.

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2.

D

Salesforce provides CRM application and more number of people use it, then more value it creates. So, Salesforce has networking effect.

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3.

D

All the pointers mentioned work as barriers to entry. It can be huge capital investment, government regulations and or access to the channels.

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5.

False

Both of these players balance each other in the competitive market.

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6.

Threats ( competitors)

These are the players, offering movie and other shows streaming to the people who watch cable television.

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7.

True

The model is good for one firm operating in one industry, but it cannot analyse the firm that is present in different ijdustries having different issues.

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8.

D

These are the strategies used by the firms so that they compete against each other and rivalry intensifies.