Market & Industry Analysis Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Market & Industry Analysis flashcards as text
Which type of market analysis examines macroeconomic, technological, social, environmental, legal, and political factors affecting an industry?
Answer: PESTLE Analysis
PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis identifies external macro-environmental factors that shape industry conditions.
A market experiencing excess capacity and declining prices is most likely in which phase of the industry life cycle?
Answer: Decline
The decline phase is characterized by falling demand, excess capacity, price wars as firms fight for shrinking market share, and eventual industry exit.
The term 'price leadership' in an oligopoly refers to a situation where:
Answer: One firm sets prices and rivals follow
Price leadership occurs when a dominant firm sets its price and rival firms follow suit, achieving tacit coordination without explicit agreement.
Which measure captures the total economic value created by all producers and consumers in a market?
Answer: Total surplus (consumer plus producer surplus)
Total surplus is the sum of consumer surplus and producer surplus, representing the aggregate net benefit derived from all market transactions.
When an industry's supply curve is perfectly inelastic in the short run, a demand shock primarily affects:
Answer: Market price
With perfectly inelastic supply, quantity cannot adjust in the short run, so any shift in demand manifests entirely as a price change.
A firm's 'core competency' as defined in strategic market analysis refers to:
Answer: A unique bundle of skills and technologies that provide competitive advantage
Core competencies, as defined by Prahalad and Hamel, are distinctive capabilities that are difficult to replicate and enable a firm to access multiple markets.
In conducting a market sizing analysis, the 'bottom-up' approach estimates total market size by:
Answer: Aggregating individual customer or segment-level demand estimates
The bottom-up approach builds a market size estimate by summing disaggregated unit demand or spending across customer segments rather than starting from aggregate statistics.