Question 1

An industry is defined as:

Accepted Answer

A)  a group of firms producing the same products or services. 
B)  firms producing items that sell through the same distribution channels. 
C)  firms that sell the same products or services to the same customer base. 
D)  a group of firms producing products that are close substitutes.

Question 2

As customers come to believe that a firm's product is unique, this allows the firm to:

Accepted Answer

A)  decrease its advertising expenditures. 
B)  customize its product. 
C)  force other companies out of the market by lowering prices. 
D)  obtain loyal customers.

Question 3

DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey.Although DWK is selling some of the products over the Internet, in order to gain economies of scale, the products must be sold in retail outlets as well.The main barrier to entry that DWK is likely to encounter here is:

Accepted Answer

A)  government licensing and permits. 
B)  access to distribution channels. 
C)  consumers' switching costs. 
D)  cost disadvantages independent of scale.

Question 4

The industry environment directly influences a firm and its competitive actions and responses.

Accepted Answer

A) True 
 B)False

Question 5

The more distant strategic groups are in terms of their strategies, the greater the likelihood of rivalry between the groups.

Accepted Answer

A) True 
 B)False

Question 6

Blood banks are highly dependent on donors.In the terminology of industry analysis, which of the following statements about donors is accurate?

Accepted Answer

A)  Blood donors are suppliers and are powerful because of the critical nature of what they provide to the blood bank. 
B)  Blood donors are suppliers and are powerful because of their concentration relative to the blood bank. 
C)  Blood donors are buyers and are not powerful because switching costs to change to alternative inputs are low. 
D)  Blood donors are buyers and are powerful because of the volume of blood needed.

Question 7

How does the aging of the population pose a threat to firms?

Accepted Answer

A)  Older people have limited purchasing power 
B)  Delayed retirement keeps people in positions when they are no longer able to effectively do their jobs. 
C)  It becomes more difficult for firms to hire and retain a workforce that meets their needs. 
D)  Older and more experienced workers demand higher salaries, boosting production costs.

Question 8

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:

Accepted Answer

A)  high barriers to exit. 
B)  high switching costs. 
C)  high fixed costs. 
D)  low levels of competitive rivalry.

Question 9

The economic environment refers to:

Accepted Answer

A)  the nature and direction of the economy in which a firm competes or may compete. 
B)  the economic outlook of the world provided by the World Bank. 
C)  an analysis of how the environmental movement and world economy interact. 
D)  an analysis of how new environmental regulations will affect the U.S.economy.

Question 10

Buyers are powerful when:

Accepted Answer

A)  there is a threat of forward integration. 
B)  they purchase a small proportion of the supplier's output. 
C)  switching costs are low. 
D)  the buyers' industry is fragmented.

Question 11

Firms within strategic groups:

Accepted Answer

A)  follow dissimilar strategies. 
B)  follow similar strategies across certain dimensions. 
C)  typically engage in greater intergroup rivalry than intragroup rivalry. 
D)  exist almost exclusively in the manufacturing sector.

Question 12

Competitor analysis is focused on the factors and conditions influencing an industry's profitability potential.

Accepted Answer

A) True 
 B)False

Question 13

Applications developed for iPhones make the phone more valuable to iPhone users.App developers are __________ to Apple.

Accepted Answer

A)  suppliers 
B)  customers 
C)  competitors 
D)  complementors

Question 14

All of the following are aspects of the political/legal segment of the general environment EXCEPT:

Accepted Answer

A)  antitrust laws. 
B)  attitudes and values. 
C)  taxation laws. 
D)  deregulation philosophies.

Question 15

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

Accepted Answer

A)  age structure 
B)  geographic distribution 
C)  income distribution 
D)  ethnic mix

Question 16

Which of the following is NOT an activity used in the external environmental analysis process?

Accepted Answer

A)  Scanning 
B)  Decrypting 
C)  Monitoring 
D)  Assessing

Question 17

Strategic groups are firms in different industries following the same or similar strategies.

Accepted Answer

A) True 
 B)False

Question 18

A firm that sells cannabis in the states of Colorado and Washington might consider expanding into California, as that state recently legalized the retail selling of cannabis.The firm may also want to examine other state laws to see where else cannabis sales are legal.However, it would be ineffective to develop a strategy to encourage legalization in states that currently prohibit it as a means of future expansion, since firms are generally unable to influence the political/legal segment of the external environment.

Accepted Answer

A) True 
 B)False

Question 19

Clarissa is a sales representative for a large pharmaceutical firm.While calling on one of her major clients, the purchasing director of a hospital, the client told her confidential information that a sales representative from a competing firm had passed on to him.The information completely contradicts Clarissa's firm's understanding of the competitor's business strategy and would allow Clarissa's employer to gain many of the competitor's clients.Which of the following ethical implications may result from this situation?

Accepted Answer

A)  There is no ethical or legal concern here for Clarissa. 
B)  The ethical dilemma is not Clarissa's but her client's, since he passed on confidential information to her voluntarily. 
C)  The ethical dilemma here is the right of competitors not to reveal certain information. 
D)  This is an example of ethical competitor intelligence obtained as eavesdropping.

Question 20

Describe and discuss the four activities of the external environmental analysis process.

Accepted Answer

The answer of Describe and discuss the four activities of...

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

An industry is defined as:

As customers come to believe that a firm's product is unique, this allows the firm to:

The industry environment directly influences a firm and its competitive actions and responses.

The more distant strategic groups are in terms of their strategies, the greater the likelihood of rivalry between the groups.

Blood banks are highly dependent on donors.In the terminology of industry analysis, which of the following statements about donors is accurate?

How does the aging of the population pose a threat to firms?

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:

The economic environment refers to:

Buyers are powerful when:

Firms within strategic groups:

Competitor analysis is focused on the factors and conditions influencing an industry's profitability potential.

Applications developed for iPhones make the phone more valuable to iPhone users.App developers are __________ to Apple.

All of the following are aspects of the political/legal segment of the general environment EXCEPT:

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

Which of the following is NOT an activity used in the external environmental analysis process?

Strategic groups are firms in different industries following the same or similar strategies.

Describe and discuss the four activities of the external environmental analysis process.