Question

Which of the following economic characteristics is consistent with a grocery store chain?

• A. Minimal competition

• B. Extensive competition

• C. High net income to sales

• D. Differentiated product

Which of the following is not one of Porter’s five forces?

• A. Buyer Power

• B. Supplier Power

• C. Threat of Regulation

• D. Threat of Substitutes

The second step in financial statement analysis is to identify the company strategy. Which of the following is a question an analyst should ask when performing a strategy analysis?

• A. Are industry sales growing rapidly or slowly?

• B. Do earnings include revenues that appear mismatched with the business model employed by the firm?

• C. Does the industry include a large number of firms selling similar products?

• D. What is the company’s degree of geographical diversification?

Answer 1

(1)

B. Extensive Competiton Because there are many giant companies are there in retail grocery business which has well established their Network like a Walmart so there is extensive Competiton in retail and another reason for such extensive Competiton is Homogeneous Product offering by firms in market that means you cannot differentiate your product from compititors significantly.

(2) C. Threat of Regulation

the five forces if Poter includes Threat of new entrant, bargaining power of customer, bargaining power of supplier, Threat of substitute Product and the last is Riverlery among the compititors. The threat of Regulation is not included here.

(3) D. What is company's degree if geographical Diversification

Because the degree diversification has IMPORTANT implementation on corporate strategic planning so the this analysis is very necessary. If firms are not much diversified and having business in related industry than firm can share reasource so this will help for reasource allocation decision also.