Exam 3: The External Assessment

External audits attempt to identify key variables that offer actionable responses.

Forecasts are educated assumptions about future trends and events.

In an EFE Matrix, opportunities often receive higher weights than threats, but threats too can receive high weights if they are especially severe or threatening.

Five major categories of external variables are: 1)economic forces, 2)social, cultural, demographic, and natural environment forces, 3)political, governmental, and legal forces, 4)technological forces and 5)demographic forces.

Which of the following sectors of the economy would be most impacted by technological developments?

According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: 1)rivalry among competing firms, 2)potential entry of new competitors, 3)potential development of substitute products, 4)bargaining power of suppliers, and 5)bargaining power of consumers.

________ is NOT part of an external audit.

Which of the following is NOT a published source of external strategic information?

The historical trend of people moving from the Northeast and Midwest to the Sunbelt and West has dramatically increased.

Freund argues that key external factors must not be hierarchical.

Walgreens and CVS pharmacies are located generally across the street from each other and battle each other every day on price and customer service.

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, and technological trends.

India is increasing tariffs on foreign steel.

A low value of the dollar means lower exports and higher imports.

Organizations never develop their own projections.

According to Michael Porter, what are the five competitive forces that create vital opportunities and threats for organizations? Which force do you feel is most important in the computer industry today? Why?

In the face of a deepening global recession, countries worldwide are resorting to protectionism to safeguard their own industries.

An effective CI program allows all areas of a firm to access consistent and verifiable information in making decisions.

In general, what happens to American goods in overseas markets when there is a strong dollar?

Significant barriers to entry are not always sufficient to keep some new firms from entering industries with higher-quality products, lower prices, and substantial marketing resources.