Deck 3: External Analysis: The Business Environment

Question 1

Dependence on a few large customers is a good recipe for enhanced profits

Answer 1

False
Few large customers will squeeze their suppliers' margins rendering them less profitable

Question 2

Regional trading blocs characterize much of the world

Answer 2

True
Examples are the EU, NAFTA and ASEAN which cover significant world economies

Question 3

Information technology has afforded huge productivity increases in many industries

Answer 3

True
The text gives an example in Table 3.7, but there are many other examples in retailing, manufacturing and service industries in general

Question 4

Sustaining technologies improve performance on dimensions not valued by existing customers

Question 5

Low entry barriers typically produce high profitability

Question 6

Parallel competitors need not concern the strategist

Question 7

Business unit strategy requires a detailed understanding of customer needs

Question 8

Some investors are not interested in firms' environmental performance

Question 9

All firms in an industry are similarly affected by its structure

Question 10

Technological advance and deregulation have reduced the importance of indirect competition

Question 11

Pressure from suppliers is independent of their importance to the firm

Question 12

Many different players may influence industry structure and firm performance

Question 13

Market segmentation scheme should reviewed and checked as needed

Question 14

Market perspectives are competitor-specific

Question 15

Managers need to be open to weak signals

Question 16

It is sometimes difficult to foresee the impact of environmental changes

Question 17

Investor ignorance of risk is exceedingly rare

Question 18

The ability of national governments to pursue independent economic policies has diminished

Question 19

Demographic changes have had significant impact on some countries immigration policies