CERTIFICATION EVALUATION EXAMS FULL
QUESTION SET WITH SOLVED ANSWERS
โ Implications for strategy: shaping industry structure. Answer:
when a company exploits structural change, it is recognizing, and
reacting to, the inevitable. An industry's structure can be reshaped
in two ways: by redividing profitability in favor of incumbents, or by
expanding the overall profit pool.
โ Redividing profitability. Answer: to capture more profits for
industry rivals, the starting point is to determine which force or
forces are currently constraining industry profitability and address
them The strategist's goal here is to reduce the share of profits that
leak suppliers, buyers, and substitutes or are sacrificed to deter
entrants.
โ Expanding the profit pool. Answer: when overall demand grows,
the industry's quality level rises, intrinsic costs are reduced, or
waste is eliminated, the pie expands. The total pool of value available
to competitors, suppliers, and buyers grows.
โ Defining the industry. Answer: the five competitive forces hold the
key to defining the relevant industry in which a company competes.
Drawing industry boundaries correctly, around the arena in which
