Management 490 Chapter 2 Part 1

Political power refers to the ability of individuals or groups to influence government regulations and laws. In the context of the question, having political power enables firms to shape the rules by which they operate and compete. This can be done through lobbying, campaign contributions, or other means of exerting influence on policymakers. By having political power, firms can seek to create a regulatory environment that is favorable to their interests, giving them a competitive advantage over their rivals.

Entry barriers refer to the obstacles or challenges that make it difficult for new firms to enter a specific industry. These barriers can include factors such as high initial investment costs, government regulations, economies of scale, brand loyalty, and access to distribution channels. These barriers discourage new firms from entering the industry as they may face difficulties in competing with established companies and achieving profitability. Therefore, entry barriers are one of the forces that discourage new firms from entering the industry.

The given answer "Competitors" is correct because the question is asking for the three types of competitors, which are existing competitors, potential competitors, and indirect competitors. The answer directly matches one of the options given in the question.

The given answer "Suppliers" is the correct explanation for the statement "Provide equipment, supplies, components, parts, and raw materials". Suppliers are the entities or individuals that provide these items to industries or businesses. They play a crucial role in the supply chain by ensuring that the necessary equipment, supplies, components, parts, and raw materials are available for the production process. Without suppliers, industries would struggle to obtain the necessary resources to operate efficiently.

Environmental uncertainty refers to the lack of knowledge or predictability about future events or changes in the external environment of a firm. It is characterized by factors such as unpredictable market conditions, changing customer preferences, regulatory changes, and volatile economic conditions. In this context, environmental uncertainty reduces a firm's ability to predict with confidence the future state of its environment, including factors such as demand, competitor actions, new regulations, the cost of supplies, or the availability of labor. This uncertainty can make it challenging for firms to make informed decisions and adapt their strategies effectively.

The correct answer is Political Strategy. This is because political strategy refers to the actions and plans implemented by an organization to create a more favorable political climate for itself. It involves activities such as lobbying, public relations, and forming alliances with other organizations or individuals. By engaging in political strategy, organizations aim to gain influence, support, and protection from political entities, which can ultimately benefit their overall objectives and operations.

An invention refers to a new idea or technology that has been successfully demonstrated to work in a laboratory setting. It implies the creation of something new and original, often resulting in the development of a novel product or process. Inventions can range from scientific discoveries to technological advancements, and they play a crucial role in driving progress and innovation in various fields.

Indirect competitors, also known as substitutes, refer to organizations that offer goods or services that can easily replace those provided by competitors in a specific industry. These substitutes may not be direct competitors, but they fulfill similar customer needs or serve the same purpose. The presence of substitutes increases competition and poses a threat to the market share of existing competitors. Therefore, understanding and analyzing the impact of indirect competitors is crucial for organizations to stay competitive and adapt their strategies accordingly.

Innovation refers to the process of introducing a new idea, product, or method that brings about significant change or improvement. An invention, on the other hand, refers to the creation of a new product or process. While an invention is the initial idea or creation, innovation involves taking that invention and successfully replicating it on a larger scale, making it reliable and impactful. Therefore, the given answer, "Innovation," is correct as it aligns with the concept of replicating an invention on a meaningful scale.

A strategic group map is a visual representation of industry rivals plotted based on two or more strategic dimensions that are important to the industry's strategy. It helps to identify the different groups or clusters within an industry and understand their competitive positions and strategies. By analyzing the strategic group map, companies can gain insights into the competitive landscape, identify potential opportunities or threats, and make informed strategic decisions.

Strategic groups refer to clusters of similar competitors within an industry. These groups are formed based on similarities in terms of their strategies, target markets, and competitive advantages. By analyzing strategic groups, firms can gain insights into the competitive dynamics of the industry and identify potential opportunities and threats. Strategic group maps are visual representations that help in understanding the competitive landscape and positioning of different firms within the industry. The task environment refers to the external factors that directly affect an organization's ability to achieve its objectives. Therefore, the correct answer in this case is strategic groups, as it specifically relates to the concept of clusters of similar competitors.

Mutual advantage refers to a situation where both parties involved in a business relationship benefit from their interactions. In this context, the ability to conduct business on a long-term and sustainable basis is dependent on establishing relationships that are mutually advantageous. This means that both parties should gain value from the relationship and have a shared interest in its continuation beyond a single transaction. By focusing on mutual advantage, businesses can build trust, loyalty, and cooperation, which are essential for long-term success and sustainability.

Collusion refers to an illegal or unethical agreement between competitors to manipulate the market in their favor. In the context of the given options, collusion is the most appropriate answer as it aligns with the concept of formal price-setting cooperation, where competitors conspire to fix prices, allocate markets, or engage in other anti-competitive practices. This behavior is generally considered illegal as it restricts competition and harms consumers. Therefore, collusion is the correct answer in this case.

Selling products that can be substituted for products sold by existing competitors can be a strategy to gain an advantage over indirect competitors. Indirect competitors are businesses that offer substitute products or services, making them a potential threat. By offering similar or alternative products, a company can attract customers who may have otherwise chosen the indirect competitor. This strategy helps in reducing the market share of indirect competitors and increasing the market share of the company. It also helps in overcoming entry barriers as customers have more options to choose from.

Industries refers to a group of organizations that compete directly with each other to win orders or sales in the marketplace. This term encompasses various sectors or fields where companies operate and offer similar products or services. These organizations strive to gain a competitive edge over their rivals and attract customers to purchase their offerings. By understanding the dynamics of the industry they belong to, companies can devise strategies to outperform their competitors and achieve success in the market.

The task environment refers to the specific external factors that directly affect an organization's operations and performance. It consists of stakeholders with whom organizations interact on a regular basis. These stakeholders can include customers, suppliers, competitors, and regulatory agencies. By understanding and managing the task environment, organizations can effectively respond to changes and opportunities in their industry. Indirect competitors (substitutes) and political power are elements that can be part of the task environment, as they can impact an organization's operations and competitive landscape.

The correct answer is "Technology" because the question is asking for the factor that influences human knowledge about products and services and the way they are made and delivered. Technology plays a crucial role in shaping and advancing human knowledge in various industries. It enables new innovations, improves efficiency in production and delivery processes, and provides access to information and resources that contribute to the overall understanding and development of products and services.

The correct answer is "Other Factors". Special interest groups, unions, communities, and government agencies have the power to take actions that can impact the task environment of organizations. These actions can lead to organizations having to invest money, which in turn can influence their cost structures and profits. However, it is important to note that apart from political power, there are also other factors that can have a similar effect on organizations, such as economic factors, technological advancements, market conditions, and social trends. These factors can also cause organizations to invest money and impact their cost structures and profits.

A basic innovation refers to a groundbreaking invention or discovery that has a wide-ranging impact across multiple product categories or industries. It goes beyond simply improving existing products or technologies and instead creates a whole new paradigm or way of doing things. Examples of basic innovations include the microprocessor, which revolutionized the field of computing, and the mapping of the human genome, which has had profound effects on medicine and biology. These innovations have far-reaching implications and can shape the future of various industries.