Exam 2: The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT:

Which of the following, identified in an analysis of the general environment, is an opportunity for an entrepreneur who wishes to open a business providing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people?

Explain why it is important for organizations to analyze and understand the external environment.

The five competitive forces model expands the arena of competitive analysis beyond direct competitors (i.e., rivals) to include buyers and suppliers who may also be a source of competition.

Switching costs, access to distribution channels, economies of scale, large numbers of competing firms, and slow industry growth are some of the entry barriers that may affect the threat of new entrants to an industry.

The legislation introduced in the U.S. Congress during the early tenure of the Obama administration intended to reduce the amount of work U.S. companies outsource and is an example of a potential change in the sociocultural segment of the general environment.

Demographic, economic, political/legal, sociocultural, technological, global, and physical are the seven elements comprising the industry environment.

Describe the seven segments of the general environment.

The Obama administration sought to pursue policies that would:

Exit barriers are especially low in the airline industry because aircraft are not particularly specialized and can easily be sold to other airlines, air cargo companies, the military, or even to wealthy individuals who want to own a private jet.

Generally, industries with stronger competitive forces have higher profit potential.

The U.S. Hispanic market is the third-largest "Latin American" economy behind Brazil and Mexico.  This impacts the ______ aspect of demographic segment analysis.

Early adopters of new technology often achieve higher market shares and higher returns than later adopters of the technology.

An owner of a stable of racehorses has been earning below-average returns for more than 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of:

Eavesdropping by the NSA on average Americans is ethical because it is a governmental organization instead of a for-profit company.

Understanding how new knowledge can develop new products, processes, or materials is a result of analyzing the ______ segment of the general environment.

Aardvark Corp. has three products. Two products together make up two-thirds of revenues and constitute 50 percent of company profits. Aardvark's third product makes up one-third of sales. With profitability far above the industry average, this product is responsible for one-half of Aardvark's profits. Which of the following statements regarding assessment of the general environment is accurate for Aardvark?

For a restaurant business dependent on drive-thru customers, the major cost disadvantage independent of scale would be if:

All of the following are ethical sources of data for external analysis EXCEPT:

Circuit Inc. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component that is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely?