Assignment Solutions Spot: Question 1

For this industry, the Threat of New Entrants is

likely to be a strong threat due to high barriers to entry

not likely to be a strong threat due to the ability of firms to rapidly duplicate the technology of the various airlines

likely to be a strong threat due to the ability of other firms providing transportation such as Greyhound to begin providing air transportation

not likely to be a strong threat on a world-wide basis due to the high barriers to entry

Question 2

For this industry, the Threat of Substitute Products is

likely to be a strong threat due to the fact that one airline can easily be substituted for another by consumers

likely to be a strong threat due to the fact there are not very good substitutes available for airline transportation

not likely to be a strong threat due to the fact that there are very good substitutes available for airline transportation

not likely to be a strong threat due to the fact that there are not very good substitutes available for airline transportation in many instances

Question 3

For this industry, the Rivalry among Existing Firms is

very strong due to the strong competition between firms such as Boeing, Airbus, etc..

weak due to the fact that the airline industry is presently growing extremely rapidly

very strong due to the strong competition between firms such as Delta, Southwest Airlines, American, etc. and slow growth, and high fixed costs

weak due to the fact industry is basically saturated

Question 4

For this industry, the Bargaining Power of Customers,

is strong due to the fact that no one customer buys a large number of airline tickets

could include customers that are re-sellers of tickets as well as customers that are end users of tickets

is weak due to the fact that most customers buy a large number of tickets each year

is strong due to the fact that there are a small number of tickets sold in a single year

Question 5

For this industry, the Bargaining Power of Suppliers,

is probably of medium strength due to a mixture of power among the various suppliers to the airline industry

is probably strong since aircraft are now basically commodities

is probably weak since there are very few sources of aircraft

is probably strong due to the rivalry between airlines

Question 6

Which of the following could be considered an opportunity for Delta Airlines?

Excellent research and development department

Excellent advertising effectiveness

Increasing vacation travel to southern states, particularly Florida

Top management has many years of experience

Effective marketing segmentation

Question 7

Delta Airline’s competitive strategy can be best-described as:

differentiation focus

differentiation

concentric diversification

cost leadership

cost focus

Question 8

Would physical resources or people-based resources be more likely to be the source of

a sustainable competitive advantage at Delta Airlines?

people-based resources

physical resources

both are equally likely

Question 9

In the airline industry, frequent-flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are

rare.

causally ambiguous.

socially complex.

valuable.

Question 10

Which of the following is a strength of Delta?

It is the third largest passenger carrier in the world in terms of revenue.

It has a productivity advantage among legacy carriers.

Business travelers are far less price sensitive than leisure travelers.

a and b only

All of the above

Question 11

Which of the following is a strength of Southwest?

Its 27-minute turn time.

Its profit margin (income per available seat mile).

Its load factor.

a and b only.

All of the above.

Question 12

Which of the following is a weakness of Delta?

Employee compensation.

Global economic slowdown.

Possibility of terrorist attacks.

a and b only.

All of the above.

Question 13

Widespread access to airline fares and schedules via Internet reservation systems has effectively __________ and __________.

increased the bargaining power of buyers; increased industry rivalry.

increased the bargaining power of buyers; decreased industry rivalry.

decreased the bargaining power of buyers; decreased industry rivalry.

decreased the bargaining power of buyers; increased industry rivalry.

None of the above

Question 14

According to the Porter’s Five Forces Model which of the followings impacted the intensity of rivalry in the airline industry?

Slow industry growth, high fixed costs and high strategic stakes

Numerous and equally balanced competitors and the threat of substitutes

Fuel suppliers, high exit barriers and high strategic stakes

Bargaining power of buyers, numerous and equally balanced competitors.

Question 15

JetBlue has contradicted the general opinion that:

barriers to entry in the airline industry are too high to allow new competitors to be successful.

switching costs are too high for a new competitor to be successful

product/service substitutes are not viable in the airline industry.

the high strategic stakes of international competitors would be too fierce to allow success for a new U.S. entrant.

Question 16

Which segment in the external environment influences airline industry the least?

Economic segment

Technological segment

Legal/political segment

Demographic segment

Question 17

The environmental segments of the airline industry that comprise the general environment typically will NOT include:

demographic factors.

sociocultural factors.

substitute products/services.

technological factors

Question 18

What is the strategy of Southwest?

Low Cost

Focused

Low cost/focused

Low cost/differentiation

Focused/differentiation

Question 19

Which of the following is a primary value chain activity for Delta?

Technology development

Operations

Employee salaries

Procurement

Human Resources

Question 20

One of Southwest Airlines’ competitive advantages is highly difficult for competitors to imitate. This is their:

advanced reservation processing technology.

deep market penetration.

organizational culture.

research and development.