Deck 3: External Strategic Audit

Question 1

The opportunities and threats in the SWOT analysis of any organization will enable it to assess the internal and external environments.

Answer 1

False

Question 2

Rise in demand for online services can be an opportunity for e-businesses like Talabat.com.

Answer 2

True

Question 3

Threats, such as product recalls, can be any factor or situation that might be expected to hinder efforts to achieve organizational objectives.

Answer 3

False

Question 4

Most research suggests that there is no evident relationship between environmental scanning and organizational performance.

Question 5

The level of interest rates can determine the level of demand for a company's products.

Question 6

High inflation represents an opportunity to companies.

Question 7

Companies belonging to different strategic group within the same industry tend to be strong rivals compared to companies belonging to the same strategic group.

Question 8

Competitive Profile Matrix (CPM) identifies a firm's major competitors and their particular opportunities and threats.

Question 9

In Competitive Profile Matrix (CPM), the highest total weighted score of indicates the strongest industry.

Question 10

The rating 4 in the External Factor Evaluation (EFE) Matrix means the factor represents a major threat.

Question 11

In general, the Competitive Profile Matrix (CPM) should comprise twenty to thirty key success factors in order to be capable of assessing all aspects.

Question 12

A total weighted score of 1.0 in an External Factor Evaluation (EFE) Matrix indicates that an organization competes in an attractive industry and has abundant external opportunities, while a total score of 4.0 would characterize an organization that competes in an unattractive industry and faces severe external threats.

Question 13

An organization faces economies of scale when the marginal cost increases with an increase in the output.

Question 14

Porter further suggests that having to augment capacity in large increments adds to the competitiveness as increased capacity often leads to overproduction.

Question 15

Economic growth tends to produce a general easing of competitive pressures within an industry.

Question 16

Complementary products are defined as those that would satisfy similar needs of the consumer, but be different in their actual characteristics.

Question 17

When the switching costs are low, buyer power is lower.

Question 18

Entry barriers are low when capital requirements are low and switching costs are low.

Question 19

Under the time series analysis, it is assumed that the dependent variable has a cause and effect relationship with one or more other independent variables.

Question 20

Delphi group procedure is usually accomplished when all group members are in the same location and generally known to each other.

Question 21

Qualitative forecast?ing is definitely better than quantitative forecasting, since intuitive skills play an important part.

Question 22

Computer Simulation Technique gives the organization choices, which form the foundation for planning, and may take on added value by generating scenario forecasts.

Question 23

One can scan organizational environments in a variety of ways, and high technology devices are necessarily needed.

Question 24

SWOT analysis a special approach designed to help organizations prepare for a crisis.

Question 25

Movement in currency exchange rates has a direct impact on the competitiveness of a company's products in the domestic market, but not in the international market.

Question 26

In an organization's SWOT analysis, the opportunities and threats will be identified in _____________:

A) An internal analysis
B) An external analysis
C) Both in internal and external analysis
D) Mainly in internal analysis, but sometimes in external analysis

Question 27

_____________ is any factor or situation in the external environment of an organization, which might be expected to aid the organization's efforts to achieve their objectives.

A) Strength
B) Weakness
C) Opportunity
D) Threat

Question 28

Companies in some of the Middle Eastern countries face threats like_____________.

A) Limited technical knowledge
B) Political instability
C) Inefficient top management
D) Internal business process failures

Question 29

Organizations have established their own "intranets" which allow access to _____________.

A) Government regulators, but not the employees
B) Employees, but not the general internet public
C) Both employees and general Internet public
D) Only general internet public

Question 30

The process of visualizing pictures, events, and scenarios in the mind's eye is called _____________.

A) Data analysis
B) Scenario writing
C) Crisis management
D) Mental imaginary

Question 31

Widely used macroeconomic indicators include all except:

A) Growth rate of the economy
B) Inflation rates
C) Individual company demand
D) Currency exchange rates

Question 32

_______ define the value of different national currencies against each other.

A) Inflations rate
B) Currency exchange rate
C) Interest rate
D) Deflation rate

Question 33

____________ forces regulate the values, norms, mores, and customs of society.

A) Economic environment
B) Political-Legal environment
C) Socio-cultural environment
D) Micro environment

Question 34

Factors within the __________ domain include environmental protection laws, tax laws, government stability, laws on hiring and promotion, foreign trade regulations and so on.

A) Economic environment
B) Political-Legal environment
C) Socio-cultural environment
D) Micro environment

Question 35

____________ comprises business units or firms that "pursue similar strategies with similar resources."

A) An investment group
B) A resource group
C) A strategic group
D) A business group

Question 36

Competitive Profile Matrix (CPM) identifies a firm's major ___________ and their particular ________________.

A) Customers, strengths and weakness
B) Competitors, opportunities and threats
C) Competitors, strengths and weakness
D) Customers, opportunities and threats

Question 37

Total weighted score ranges from ________________ in the Competitive Profile Matrix (CPM).

A) 1 (lowest) to 5 (highest)
B) 0 (lowest) to 4 (highest)
C) 1 (lowest) to 4 (highest)
D) 1 (lowest) to 2 (highest)

Question 38

External Factor Evaluation (EFE) Matrix summarizes major ____________ and _________ found in the economic, social, cultural, demographic, political, and legal environment.

A) Strength and threats
B) Opportunities and threats
C) Opportunities and weakness
D) Strength and weakness

Question 39

In an External Factor Evaluation (EFE) Matrix, a total weighted score of 4.0 indicates that an organization competes in an _________ and has ___________.

A) Attractive industry, severe external threats
B) Unattractive industry, severe external threats
C) Unattractive industry, abundant external opportunities
D) Attractive industry, abundant external opportunities

Question 40

Porter's five force model include all except:

A) The threat of new entrants
B) The intensity of rivalry between existing competitors
C) The threat of internal process failure
D) The threat of substitute products

Question 41

The extra cost that a customer will have to spend in order to switch from one product to another product is called ___________.

A) External cost
B) Direct cost
C) Substitute cost
D) Switching cost

Question 42

Buyers are likely to be powerful source under all the following circumstances except:

A) One (or very few) buyer purchases a large percentage of a firm's total sales
B) The buyer's purchases are a large portion of its costs
C) Switching costs are low
D) Backward integration is not possible

Question 43

In a situation where few substitutes are available for a products, then ___________.

A) Suppliers are more powerful than buyers
B) Buyers are more powerful than suppliers
C) Both buyers and suppliers have no power
D) Both buyers and suppliers are powerful

Question 44

Porter's five-force model suggests that intensity of competitive rivalry is high when___________.
(i) Concentration of competitors is high;
(ii) Industry growth rate is low;
(iii) Storage costs are high;
(iv) Exit barriers are low

A) (i), (ii) and (iii) only
B) (i) and (ii) only
C) (i) and (iii) only
D) All of the above

Question 45

Power of suppliers is high when ___________.
(i) Concentration of suppliers is low;
(ii) Switching costs of the buyer are low;
(iii)
Importance of customer to the supplier is low;
(iv) Availability of substitute products is high

A) (i), (ii), (iii) and (iv)
B) (iv) only
C) (iii) only
D) (i) and (ii) only

Question 46

Threat of substitute products is low when ___________.
(i) Profitability of industry producing substitute is high;
(ii) Rate of improvement in price-performance relationship of substitute product is low;
(iii) Buyers switching costs are high;
(iv) Substitute products provide comparable value

A) (i) only
B) (ii) and (iii) only
C) None of the above
D) All of the above

Question 47

__________ is the process of trying to make assumptions about the future.

A) Budgeting
B) Forecasting
C) Planning
D) Controlling

Question 48

__________ involves identifying a panel of experts that contribute their opinions separately in order to reach to an optimal decision.

A) Delphi Group procedure
B) Expert judgment
C) Causal modeling
D) Qualitative forecasting methods

Question 49

Regression analysis is a best-known technique of ________.

A) Delphi group
B) Qualitative forecasting methods
C) Scenario writing
D) Causal modeling

Question 50

_________ procedure consists of developing several alternative future scenarios or states of affairs for the organiza?tion, its industry, or the economy in general by tapping experts in the field.

A) Delphi Group procedure
B) Expert judgment
C) Scenario writing
D) Causal modeling

Question 51

Quantitative Forecasting Methods include all except:

A) Causal modeling
B) Time series analysis
C) Expert judgment
D) Regression analysis

Question 52

Explain how mental imagery and crisis management help managers in strategic planning process.

Question 53

Compare between the qualitative and quantitative forecasting methods and identify the most appropriate situation to use each method.

Question 54

Choose any organization and apply Competitive Profile Matrix (CPM) by justifying each the selection of each success factor.

Question 55

To what extent does intuition play a significant role in the formulation and implementation of strategic plans?

Question 56

"A major threat to a company's profitability can come from within its own strategic group." Elaborate on this statement with real examples.

Question 57

Explain how organizations can survive in the current competitive environment. Support your answer with examples.

Question 58

Why should organizations prioritize crisis management while establishing strategic plans? Elaborate your answer with examples.

Question 59

What is the role of the Competitive Profile Matrix (CPM) in determining the strategic position of an organization? How can a well-developed CPM help in the strategic planning process of an organization?

Question 60

If you had to order Porter's five forces on a scale of 1 (most important) - 5 (least important), how would you do that, and why?

Question 61

Which is more threatening for an industry during the different phases of a product life cycle: threat of new entrants, or threat of substitutes? Support your answer with appropriate examples.