Learning Module 6 Industry and Competitive Analysis

Which of the following is the best definition of an industry for competitive analysis?

What is the primary limitation of strictly hierarchical third-party classification schemes like GICS when analyzing a multi-segment company?

An analyst defines the market size for a retail chain as total national retail sales excluding autos. Which top-down concept is the analyst using when estimating the chain’s potential revenue as a percentage of this market?

Which measure is best suited to compare industry concentration across markets and identify potential antitrust concerns?

Which of the following is NOT one of Porter’s Five Forces?

Which PESTLE category would the introduction of a carbon tax on fossil fuels be classified under?

Which industry attribute is most likely to make an industry 'defensive' rather than cyclical?

A market has four firms with shares of 30%, 30%, 20%, and 20%. What is the Herfindahl-Hirschman Index (HHI)?

Which factor most directly increases the bargaining power of customers in an industry?

Which of the following is the best evidence of a network effect in an industry?

Which PESTLE category best captures a demographic aging trend that increases demand for healthcare services?

When should an analyst prefer a three-stage DDM over a two-stage DDM?

Which of the following situations makes the Gordon constant-growth DDM most appropriate?

If a preferred stock pays a perpetual fixed dividend of $5 and the required return on preferreds is 6%, what is the estimated fair value using the perpetuity formula?

Which valuation model replaces dividends with an estimate of cash available to equity holders and is preferred when firms do not pay dividends?

An analyst estimates the justified forward P/E using the Gordon framework as P0/E1 = p / (r - g). What does p represent?

Which multiple tends to be more stable across business cycles and is often preferred for cyclical industries when earnings are volatile?

An analyst calculates an industry HHI of 1,600. How would this market typically be classified by competition authorities?

Which of the following would most likely reduce customer bargaining power in an industry?

Which of these is an example of a sustaining technological innovation?

An analyst discovers that a company’s top 3 customers account for 60 percent of its sales. Which Five Force does this observation most directly relate to?

Which analytic step would best detect whether a company’s new store openings are cannibalizing sales of its existing stores?

Which external influence is most likely to cause a structural decline in demand for fossil fuel producers over the next 20 years?

An industry has high fixed costs and largely standardized products. Which generic competitive strategy is most likely to be effective?

When an incumbent enjoys exclusive shelf space arrangements with retailers that limit new entrants’ access to distribution, this barrier most directly affects which force?

Which indicator is most useful as a short-term signal that industry rivalry is intensifying?

An analyst uses total national retail sales as the market size for a warehouse retailer and excludes automobile dealers. Why exclude autos?

Which metric best indicates whether a marketplace platform has pricing power over merchants that sell on the platform?

Which of the following is most likely an indicator of economies of scale for a retail chain?

When using the top-down method, an analyst expresses a company’s revenue as market size times market share. What is the primary judgment the analyst must make?

Which of the following changes is most likely to decrease threat of substitutes in an industry?

A successful differentiation strategy typically does NOT rely on which of the following?

Which statement about the relationship between industry and company effects on profitability is most consistent with the chapter’s summary of McGahan and Porter?

Which metric would best help assess whether a retailer has pricing power over customers?

A firm’s operating costs are largely fixed while its contribution margin per unit is positive. Which of the following is TRUE about its degree of operating leverage (DOL)?

Which of the following is a common empirical sign that an industry has economies of scope?

Which of the following best characterizes a 'defensive' industry in the chapter’s classification?

Which of the following best summarizes why analysts combine top-down and bottom-up revenue approaches?

If an industry is experiencing commoditization, which Five Force is likely increasing in intensity?

Which of the following best describes the PESTLE analysis purpose in industry assessment?

Which of the following is NOT usually a reason management gives for share repurchases?

Suppose an incumbent payment network has effective network effects. Which new-entrant strategy is most likely to succeed in displacing the incumbent?

Which analytic step would best help detect whether an industry’s profitability is structurally declining?

An analyst observes that a company’s days of inventory on hand (DOH) decreased significantly while third-party marketplace sales increased as a share of total GMV. What is the most likely explanation?

Which of the following best explains why analysts examine both top-down and bottom-up revenue analyses together?

Which industry is most likely to exhibit high entry barriers from regulation and licensing according to PESTLE and Porter analysis?

Which of the following would be the best early warning sign for rising supplier bargaining power?

Why might an analyst prefer EV/EBITDA multiples over P/E multiples when comparing firms with different capital structures?

An analyst is using a top-down market-share forecast. Market growth is projected at 3.4% annually and the company has historically added 2 basis points to its market share each year. If the market is $4,165 billion, what is the company’s forecast GMV next year if current market share is 0.21%?

Which action is most consistent with a company pursuing a focus strategy?