Introduction to Industry and Company Analysis

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Question 1 of 12

1. Question
Uses of Industry Analysis and Approaches to Classification

Match the company descriptions to the type of company based on business-cycle sensitivity. (Drag and drop)
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- "This company's products are expensive and can be considered to be non-essential"
- "This company's products are innovative and many people are just beginning to discover its products."
- "This company's products are considered essential to the general masses."
- Cyclical
- Growth
- Defensive
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Question 2 of 12

2. Question
Industry Classification Systems

Commercial index providers typically classify firms by:
- Products and/or services offered
- Business-Cycle Sensitivities
- Statistical Similarities
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Question 3 of 12

3. Question
Industry Classification Systems

Deborah wishes to identify the peers for a company that she is studying. Which of the following methods is least appropriate?
- She looks for companies which are similar in size and are at the same life-cycle stage
- She examines the company's annual report to identify any key competitors mentioned.
- She studies the firms which are placed in the same industry group from commercial industry classification systems.
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Question 4 of 12

4. Question
Industry Analysis – Porter’s Five Forces

Suber is looking to disrupt the industry by converting its hotel rooms to ultra-affordable hotel rooms that are subsidised by tie-ups with shopping malls and tourist resorts. This is most likely categorised as:
- Rivalry amongst existing competitors
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of new entrant
- Threat of substitute
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Question 5 of 12

5. Question
Industry Analysis Barriers to Entry

Which of the following statements is least accurate?
- Barriers to entry can change over time due to changes in regulations and technology
- Industries with little barriers to entry are the easiest to succeed in
- Industries with high barriers to entry generally have lower levels of competition, but exceptions exist
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Question 6 of 12

6. Question
Industry Analysis – Industry Concentration

Which of the following statements is least accurate?
- Concentrated industries have low levels of competition and the companies have greater pricing power
- Fragmented industries are highly competitive and the companies have limited pricing power
- If the products offered in an industry are largely undifferentiated, the companies have little pricing power
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Question 7 of 12

7. Question
Industry Capacity and Market Share Stability

Shanti claims that an industry that she is studying has is highly competitive. Which of the following observations least support her claims?
- The companies design their systems such that they operate very differently from those of other competitors.
- The growth in demand for the systems have slowed in recent years, such that there is an oversupply in the market.
- The companies constantly improve their systems and add new features to entice the customers to switch from their competitors
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Question 8 of 12

8. Question
Industry Life Cycle and Price Competition

An industry is currently experiencing intense competition, resulting in falling prices which has hurt profitability. Companies are focused on cutting costs and improving operational efficiency in order to survive. They also try to build up brand loyalty by improving customer experience.

This industry is most likely in the __________ stage of the industry life cycle.
- Embryonic
- Growth
- Shakeout
- Mature
- Decline
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Question 9 of 12

9. Question
Industry Life Cycle and Price Competition

Which of the following companies is least likely to be “acting its age”?
- Company A is in a growth industry. It does not pay any dividends, but uses the to fund its product development and marketing costs.
- Company B is in a mature industry. It rewards its shareholders with high dividend payouts as there are few opportunities for growth.
- Company C is in a growth industry. It spends most of its cash on improving cost efficiency in the firm so that it can prepare for the competition ahead.
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Question 10 of 12

10. Question
External Influences on Industry Growth, Profitability, and Risk

Which of the following is least likely an external influence on growth, profitability, and risk of a firm?
- Changes in population demographics
- Changes in government policies
- Consolidation in number of suppliers
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Question 11 of 12

11. Question
Company Analysis

A money changer’s strategy is to offer very low spread. It achieves this by offering its services online only. This competitive strategy can be classified as:
- Low-cost strategy
- Product/Service differentiation strategy
- Predatory pricing strategy
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Question 12 of 12

12. Question
Company Analysis

Which of the following is NOT a source of returns for a company, based on DuPont Analysis?
- Total Asset Turnover
- Interest Burden
- Gross Margin
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Introduction to Industry and Company Analysis

Introduction to Industry and Company Analysis

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