Exam 2: Analyzing the External Environment of the Firm: Creating Competitive Advantages

The SWOT analysis framework leads to a conceptually simple approach to identifying the important factors that constrain strategic choices without sacrificing analytical rigor.

In most industries, new entrants will not be a threat because the Internet lowers entry barriers.

In the general environment, many relationships exist among the various elements. General environmental trends can have positive and negative impacts on various industries. For example, the aging population might have a ______ impact on the health care industry and a ______ impact on the baby product industry. These are called _____________ impacts.

Strategic groups are clusters of firms that share __________ strategies.

The five-forces model helps to determine both the nature of competition in an industry and the profit potential for the industry. E. Porter describes the competitive environment in terms of five basic competitive forces that affect the ability of a firm to compete in a given market. Together, they determine the profit potential for a particular industry.

In the value net analysis, complementors are

An automobile manufacturer acquires a rental car company. This is an example of

Research shows that many immigrants to the United States are prodigious job creators. This supports legislative battles to increase the number of H-1B visas for foreign workers.

In the general environment, which of the following is not a demographic trend?

The power of a buyer group is increased if the buyer group has less concentration than the supplier group.

In the SWOT framework, Opportunities and Threats are environmental conditions internal to the firm.

The impact of a demographic trend varies across industries.

How do infomediaries and consumer information websites increase the intensity of competitive rivalry?

Switching costs for an end user are likely to be much higher because of the Internet.

The value net is a game-theoretic approach that

An industry is composed of a set of firms that produce similar products or services, sell to similar customers, and use similar methods of production.

The more attractive the price/performance ratio of substitute products, the tighter it constrains the ability of an industry to charge high prices.

The bargaining power of suppliers increases as

Scenario analysis draws on a range of disciplines and interests. It is a more _______ approach to forecasting.

Reintermediation is responsible for an overall reduction in business opportunities.