Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

In a particular industry, products need a certain level of maintenance.Customers can take the product to service companies to provide that maintenance.However, a number of manufacturers offer reasonably priced maintenance packages as well.This level of service after the sale indicates what about the industry?

Accepted Answer

A)   Low switching costs have empowered customers.
B)   The industry is moving toward differentiation of services.
C)   The competitive rivalry in the industry is high.
D)   The economic segment of the external environment has shifted, but strategies have remained the same. C

Question 3

When Delta Air Lines wants to study Continental Airlines, it must examine both Continental and its complementor, Star Alliance.

Accepted Answer

A) True 
 B)False  True

Question 4

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

Accepted Answer

A)   economic
B)   political/legal
C)   technological
D)   global

Question 5

What are capital requirements?

Accepted Answer

A)   The benefits realized through incremental efficiency improvements
B)   The costs customers incur when they switch to a new provider
C)   The resources needed to invest in a new industry
D)   The costs incurred by a firm when it changes distributors

Question 6

The competitor analysis is the final part of the external environment analysis and focuses on each company against which a firm directly competes (for example, Coca-Cola and PepsiCo, Home Depot and Lowe's, and Airbus and Boeing).

Accepted Answer

A) True 
 B)False

Question 7

The competition between firms within a strategic group is:

Accepted Answer

A)   greater than the competition a member of a strategic group and companies outside that strategic group.
B)   less intense than the competition between strategic groups.
C)   typically very low.
D)   an unknown factor in the analysis of competitive practices within a firm's strategic group.

Question 8

Opportunities allow a company to exploit conditions in the environment while threats can lead to damage to a company's integrity.

Accepted Answer

A) True 
 B)False

Question 9

Globalfocusing is often used by firms with high levels of international operations that further increase their internationalization by focusing on global niche markets.

Accepted Answer

A) True 
 B)False

Question 10

The observation that a country reached automotive production overcapacity in 2018, is an aspect of the __________ segment of the general environment.

Accepted Answer

A)   demographic
B)   global
C)   physical
D)   technological

Question 11

Golden Lotus, an exercise club targeting healthy individuals over 50, is located in a fast-growing city in the Southwest.Which of the following factors that may have an effect on the success of Golden Lotus is the MOST directly controllable by the company?

Accepted Answer

A)   Sociocultural environment
B)   Demographics of the environment
C)   Economy of the local area
D)   Power of the customers/buyers

Question 12

Competitor analysis focuses on:

Accepted Answer

A)   firms with which the company competes directly.
B)   firms that produce products that are substitutes.
C)   all firms in the industry.
D)   companies that might enter the industry.

Question 13

The next critical technological opportunity for organizations is predicted to be: Bella's Boutique used to be a brick and mortar store exclusively.It has gradually increased its Internet sales, and online sales now account for most of its revenue.This change in sales model illustrates the importance of monitoring which segment of the environment?

Accepted Answer

A)   Political/legal
B)   Economic
C)   Demographic
D)   Technological

Question 14

A competitor's capabilities can be measured by studying its current strategies and future objectives.

Accepted Answer

A) True 
 B)False

Question 15

The bankruptcy filings by major corporations during the Great Recession illustrate that firms cannot directly control the general environment's segments.

Accepted Answer

A) True 
 B)False

Question 16

The global segment of the external environment provides many opportunities for large corporations but does not represent an appropriate market segment for family business firms, even large ones.

Accepted Answer

A) True 
 B)False

Question 17

Once a firm has determined its competitors' future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop a(n):

Accepted Answer

A)   environmental assessment.
B)   marketing plan.
C)   response profile.
D)   task force to implement the plan.

Question 18

New entrants to an industry are more likely when:

Accepted Answer

A)   it is difficult to gain access to distribution channels.
B)   economies of scale in the industry are high.
C)   product differentiation in the industry is low.
D)   capital requirements in the industry are high.

Question 19

Because recessions and recoveries follow certain patterns, firms can study the economic environment to predict economic trends.This was particularly valuable in dealing with the recovery after the global recession of 2008-2009.

Accepted Answer

A) True 
 B)False

Question 20

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.

Accepted Answer

A) True 
 B)False

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

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

When Delta Air Lines wants to study Continental Airlines, it must examine both Continental and its complementor, Star Alliance.

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

What are capital requirements?

The competitor analysis is the final part of the external environment analysis and focuses on each company against which a firm directly competes (for example, Coca-Cola and PepsiCo, Home Depot and Lowe's, and Airbus and Boeing).

The competition between firms within a strategic group is:

Opportunities allow a company to exploit conditions in the environment while threats can lead to damage to a company's integrity.

Globalfocusing is often used by firms with high levels of international operations that further increase their internationalization by focusing on global niche markets.

The observation that a country reached automotive production overcapacity in 2018, is an aspect of the __________ segment of the general environment.

Golden Lotus, an exercise club targeting healthy individuals over 50, is located in a fast-growing city in the Southwest.Which of the following factors that may have an effect on the success of Golden Lotus is the MOST directly controllable by the company?

Competitor analysis focuses on:

A competitor's capabilities can be measured by studying its current strategies and future objectives.

The bankruptcy filings by major corporations during the Great Recession illustrate that firms cannot directly control the general environment's segments.

The global segment of the external environment provides many opportunities for large corporations but does not represent an appropriate market segment for family business firms, even large ones.

Once a firm has determined its competitors' future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop a(n) :

New entrants to an industry are more likely when:

Because recessions and recoveries follow certain patterns, firms can study the economic environment to predict economic trends.This was particularly valuable in dealing with the recovery after the global recession of 2008-2009.

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.