Question 1

Which of the following would be considered part of the general environment of a firm?

Accepted Answer

A)   decreased entry barriers
B)   higher unemployment rates
C)   increased bargaining power of the firm's suppliers
D)   increased competitive intensityE) None of the above
F) All of the above

Question 2

Scenario analysis draws on a range of disciplines and interests.It is a more _______ approach to forecasting.

Accepted Answer

A)   basic
B)   fundamental
C)   in-depth
D)   superficialE) None of the above
F) A) and B)

Question 3

When the management frame of reference gets out of touch with the realities of the actual business situation,what can happen to the firm?

Accepted Answer

A)   The company business strategy no longer works.
B)   Management gets across-the-board raises.
C)   Management perceptual acuity improves.
D)   It becomes easier to maintain competitive advantage.E) None of the above
F) All of the above

Question 4

Classifying an industry into strategic groups involves judgment.If it is useful as an analytical tool,we must exercise caution in deciding what dimensions to use to map these firms.Dimensions include

Accepted Answer

A)   breadth of product and geographic scope.
B)   price and quality.
C)   degree of vertical integration.
D)   management team.E) A) and D)
F) A) and C)

Question 5

Another value of strategic grouping is that it helps a firm identify groups whose competitive position may be marginal or tenuous.

Accepted Answer

A) True 
 B)False

Question 6

Scenario planning is a useful technique for firms competing in industries characterized by __________ and ____________.

Accepted Answer

A)   predictability; stability
B)   low profit margins; stability
C)   unpredictability; change
D)   high profit margins; stabilityE) A) and C)
F) A) and B)

Question 7

A danger of forecasting discussed in the text is that

Accepted Answer

A)   in most cases, the expense of collecting the necessary data exceeds the benefit.
B)   the retrospective nature of forecasting provides little information about the future.
C)   managers may view uncertainty as black and white while ignoring important gray areas.
D)   it can create legal problems for the firm if regulators discover the company is making forecasts.E) A) and C)
F) B) and D)

Question 8

Reintermediation is responsible for an overall reduction in business opportunities.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not an example of corporate competitive analysis?

Accepted Answer

A)   banks tracking home loans
B)   airlines changing hundreds of fares daily in response to competitor tactics
C)   car manufacturers offering sales incentives based on rival offers
D)   consumers comparing product offers onlineE) A) and B)
F) All of the above

Question 10

Which of the following would be an entry barrier?

Accepted Answer

A)   easy access to raw materials
B)   low switching costs
C)   large economies of scale
D)   low capital requirementsE) A) and B)
F) A) and C)

Question 11

Supplier power tends to be highest in industries where products are vital to buyers,where switching from one supplier to another is very costly,and where there are many suppliers.

Accepted Answer

A) True 
 B)False

Question 12

Nintendo built a security chip into its game console hardware and then licensed the right to develop games to outside firms.These firms paid a royalty to Nintendo for each copy of the game sold.This is an example of Nintendo using _________ products.

Accepted Answer

A)   substitute
B)   complement
C)   unrelated
D)   differentiatedE) B) and C)
F) C) and D)

Question 13

The bargaining power of suppliers increases as

Accepted Answer

A)   threat of forward integration by suppliers increases.
B)   importance of buyers to supplier group increases.
C)   switching costs for buyers decrease.
D)   more suppliers enter the market.E) B) and C)
F) A) and D)

Question 14

Complement products typically have no impact on the value of products and services of the firm.

Accepted Answer

A) True 
 B)False

Question 15

Firms that were successful in the past can fail today because

Accepted Answer

A)   they keep pace with changes in the nature of competition.
B)   their financial situation is resilient.
C)   the company strategy is outdated.
D)   management monitors the relevant environmental factors regularly.E) A) and B)
F) A) and C)

Question 16

The strategic groups concept is valuable for charting the ______ directions of firm strategies.

Accepted Answer

A)   historical
B)   past
C)   present
D)   futureE) B) and C)
F) None of the above

Question 17

SWOT analysis raises awareness about the role of strategy in creating a match between the environmental conditions and ______________ of the firm.

Accepted Answer

A)   internal opportunities and threats
B)   internal strengths and weaknesses
C)   internal strengths and opportunities
D)   internal weaknesses and opportunitiesE) B) and D)
F) A) and D)

Question 18

In the general environment,which of the following is not a demographic trend?

Accepted Answer

A)   aging population
B)   greater disparities in income levels
C)   more women in the workforce
D)   changes in ethnic compositionE) A) and D)
F) A) and C)

Question 19

Complements are products or services that have a potential impact on the _________ of the products or services of that company.

Accepted Answer

A)   cost
B)   availability
C)   value
D)   substitutabilityE) A) and D)
F) A) and C)

Question 20

Ted Turner saw the potential of 24-hour news before anyone else.This is an example of perceptual acuity.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing the External Environment of the Firm: Creating Competitive Advantages

Reintermediation is responsible for an overall reduction in business opportunities.

Correct AnswerverifiedShow Answer

Complements are products or services that have a potential impact on the _________ of the products or services of that company.

Correct AnswerverifiedShow Answer

Which of the following is not an example of corporate competitive analysis?

Correct AnswerverifiedShow Answer

Complement products typically have no impact on the value of products and services of the firm.

Correct AnswerverifiedShow Answer

SWOT analysis raises awareness about the role of strategy in creating a match between the environmental conditions and ______________ of the firm.

Correct AnswerverifiedShow Answer

Another value of strategic grouping is that it helps a firm identify groups whose competitive position may be marginal or tenuous.

Correct AnswerverifiedShow Answer

Supplier power tends to be highest in industries where products are vital to buyers,where switching from one supplier to another is very costly,and where there are many suppliers.

Correct AnswerverifiedShow Answer

Nintendo built a security chip into its game console hardware and then licensed the right to develop games to outside firms.These firms paid a royalty to Nintendo for each copy of the game sold.This is an example of Nintendo using _________ products.

Correct AnswerverifiedShow Answer

Firms that were successful in the past can fail today because

Correct AnswerverifiedShow Answer

Scenario planning is a useful technique for firms competing in industries characterized by __________ and ____________.

Correct AnswerverifiedShow Answer

Scenario analysis draws on a range of disciplines and interests.It is a more _______ approach to forecasting.

Correct AnswerverifiedShow Answer

A danger of forecasting discussed in the text is that

Correct AnswerverifiedShow Answer

The bargaining power of suppliers increases as

Correct AnswerverifiedShow Answer

Ted Turner saw the potential of 24-hour news before anyone else.This is an example of perceptual acuity.

Correct AnswerverifiedShow Answer

When the management frame of reference gets out of touch with the realities of the actual business situation,what can happen to the firm?

Correct AnswerverifiedShow Answer

The strategic groups concept is valuable for charting the ______ directions of firm strategies.

Correct AnswerverifiedShow Answer

Which of the following would be an entry barrier?

Correct AnswerverifiedShow Answer

Classifying an industry into strategic groups involves judgment.If it is useful as an analytical tool,we must exercise caution in deciding what dimensions to use to map these firms.Dimensions include

Correct AnswerverifiedShow Answer

In the general environment,which of the following is not a demographic trend?

Correct AnswerverifiedShow Answer

Which of the following would be considered part of the general environment of a firm?

Correct AnswerverifiedShow Answer

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Scenario planning is a useful technique for firms competing in industries characterized by and __.

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