Exam 6: The External Environment

Driving forces can be categorized as social,technological,economic,environmental,political/legal,and global.

The five-forces model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy.

An industry is defined as:

According to Michael Porter,explain the conditions that create advantages for firms in certain countries and industries.

Analysis of society is important for all of the following reasons except:

When analysts develop feasible projections of future events and how quickly they will occur based on observed changes and trends,they are engaged in:

Generally,the stronger the competitive forces,the higher the profit potential of an industry.

The higher the entry barriers,the more intense is competition in an industry.

According to Porter,when do customers exhibit a powerful force on competition in an industry?

Firms can directly control the elements of the seven segments of the general environment.

What is a primary reason that an organization should monitor the broad environment?

High levels of competition may be caused by:

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

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

Exit barriers to a firm include all of the following except:

Organizations that are in a weak position relative to their suppliers can attempt to balance power through vertical integration.

Switching costs refer to the:

Which of the following may lead a firm to conclude that an industry is attractive to enter?

The intensity of rivalry in an industry is greater when the industry is growing very slowly than it is when the industry is seeing high growth in sales.

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