Free IIA-CIA-PART4 Exam Braindumps (page: 19)

Page 18 of 134

A true market signal:

  1. Is a direct market communication indicating intent.
  2. May involve a threat not intended to be carried out.
  3. May be an attempt to minimize a future provocative move.
  4. Announces a move that will occur.

Answer(s): C

Explanation:

Prior announcements of moves may minimize the provocation caused by a future strategic adjustment, e.g., a price cut. Such a move may be a genuine attempt to realign prices with changes in costs, not an aggressive grab for market share. However, the move may also be an attempt to mislead.



In which industry structure is differentiation absent, and all sellers charge the same price?

  1. Monopoly.
  2. Monopolistic competition.
  3. Oligopoly.
  4. Pure competition.

Answer(s): D

Explanation:

An industry consists of firms selling products or services that are substitutes. One way to describe an industry considers the number of sellers and the extent of differentiation ofproducts and services. In pure competition, differentiation is absent, and the same prices are charged by all sellers.



Which of the following statements is true with regard to a vertically integrated acquisition?

  1. A grocery store chain that purchases a dairy and begins to make milk-based products under its own brand is forward integrated.
  2. A movie producer that acquires a chain of theaters is backward integrated.
  3. A clothing manufacturer that acquires a chain of clothing stores is forward integrated.
  4. A soda maker that purchases its leading competitor is backward integrated.

Answer(s): C

Explanation:

Vertical integration occurs upstream (backward) by acquiring suppliers or downstream (forward) by acquiring wholesalers and retailers. An example of forward integration is a clothing manufacturer's acquisition of a chain of clothing stores in which to sell its products.



A strategic group analysis does all but which of the following?

  1. Determines what mobility barriers exist.
  2. Forecasts future group actions and trends.
  3. Considers how the firm compares with the competitors within the chosen strategic group.
  4. Predicts reaction patterns to events such as competitive attacks.

Answer(s): C

Explanation:

An overall industry analysis, not a strategic group analysis, considers how the firm compares with the competitors within the chosen strategic group, e.g., on the basis of its scale of operations, the intensity of group rivalry, and the differences in the ability of the group members to implement their strategies.






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