Question

1. The profit potential of an industry is neither random nor entirely determined by industry-specific factors. What are the functions of the five forces?

   		Mobility Barriers, Entry Barriers, Exit Barriers, Power of Buyer, Rivalry
   		Threat of Entry, Power of Suppliers, Power of Buyer, Threat of Substitute, Rivalry.
   		Power of Suppliers, Threat of entry, Network Effects, Exit Barriers, Mobility Barriers.
   		Rivalry, Co-opetition, Industry Convergence, Mobility Barriers, Exit Barriers.

1. The competitive industry structure is largely captured by:

   The number and size of its competitors

   The firms’ degree of pricing power

   The type of product or services

   The height of entry barriers

   All of the above

   Which one is not a true statement?

   		A complement is a product, service, or competency that add value to the original product offering when the two are used in tandem.
   		A company is a complementor to your company if customers. Value your product or service offering more when they are able to combine it with other company’s product or service.
   		Co-opetition is appraising the role of industry dynamics and industry convergence in shaping the firm’s external environment.

   At the start of the strategic management process, it is critical for managers to conduct a thorough analysis of the firm’s external environment to identify threat and opportunities.

   		Strategic Group Model
   		PESTEL
   		Strategy analysis
   		Strategic management

   Identify the positive effect that one user of product or service has on the value of the product or service for other users.

   		Economies of Scale
   		Network Effects
   		Captial Requirements
   		Complement

Answer 1

Threat of Entry, Power of Suppliers, Power of Buyer, Threat of Substitute, Rivalry are the functions of the five forces. This is also known as Porter's five forces theory.

The number and size of its competitors is something through which the competitive industry structure is largely captured by. Whereas the remaining ones are not relevant in this context.

Co-opetition is appraising the role of industry dynamics and industry convergence in shaping the firm’s external environment is not a true statement. As the term co-opetition refers to co-operation by competitors to achieve a strategic objective.

PESTEL is the model that can be used by managers to conduct a thorough analysis of the firm’s external environment to identify threat and opportunities. It refers to political factors, economic factors, sociocultural factors, technological factors, environmental factors, and legal factors.

Network Effects refer to the the positive effect that one user of product or service has on the value of the product or service for other users. Whereas the remaining ones are not relevant in this context.