Industry and Company Analysis

10 questions

1. 1. Which system of classification classifies companies according to their principal business activity?
   Global Industry Classification Standard (GICS)Russell Global Sectors (RGS)Industry Classification Benchmark (ICB)
2. 2. Which of the following is NOT a characteristic of a fragmented industry?
   Low barriers of entryLack of the need for differentiationHigher concentration
3. 3. Which of these industries has low entry and exit barriers?
   Oil explorationRestaurantTea processing
4. 4. Which of the following products/services would find demand in a young population in the age group 25-45?
   Assisted healthcare facilitiesAdult diapersHousing
5. 5. If an industry is characterised by high rate of innovation, which of the following statements is FALSE?
   It will have a normal full product life cycleEach improvement will help it achieve or maintain its profitabilityThe industry will be characterised with a high degree of research
6. 6. Which of these is a factor in Porter’s five forces?
   Demographic influenceBargaining power of suppliersSocial factors
7. 7. Which of the following is NOT a feature of unstable markets?
   Low concentrationHigh process innovationLarge number of firms
8. 8. Which of the following statements is untrue about an industry in its embryonic stage?
   High requirement of capitalHigh demand and awarenessLow growth
9. 9. Which of the following statements is true for a low-cost strategy?
   Good margins cannot be made, despite having lower cost of inputsProper operating and reporting mechanisms are not requiredThis strategy is characterised by tight cost control and good management
10. 10. In low cost strategies companies fight on the basis of lower price than the competition, by lowering their costs. Due to their lower costs, they achieve good profitability.

    While performing company analysis, the analyst generally does not do the following:

    Assess customer demandTake customer feedback regarding the product or serviceReview financial ratios and interpret them