Deck 4: Environmental Scanning and Industry Analysis

Question 1

Which of the following is not a major force in the societal environment?

A) political-legal forces
B) labor forces
C) economic forces
D) technological forces
E) sociocultural forces

Answer 1

B

Question 2

A corporation uses environmental scanning to avoid strategic surprises and ensure long-term health.

Answer 2

True

Question 3

Today's organizations must scan the natural environment for factors that might previously have been taken for granted.

Answer 3

True

Question 4

Describe the four general forces in the societal environment.

Question 5

The combination of the degree of complexity and the degree of change existing in an organization's external environment is/are called

A) strategic factors.
B) strategic issues.
C) environmental uncertainty.
D) strategic fit.
E) scenarios.

Question 6

Which of the following is not descriptive of external environmental scanning?

A) used as a tool to ensure a corporation's long-term health
B) used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy
C) used to identify major stockholders
D) used as a tool for corporations to avoid strategic surprise
E) used to determine a firm's competitive advantage

Question 7

In dynamic environments,the CEO's focus is on forces in the societal environment.

Question 8

Political-legal forces regulate the values,mores,and customs of society.

Question 9

According to the text,one reason environmental uncertainty is a threat to strategic managers is because

A) it is a costly and time-consuming process.
B) it creates a new playing field in which creativity and innovation can play a major part in strategic decisions.
C) it forces the strategic manager to be more stable.
D) it hampers their ability to develop long-range plans and make strategic decisions.
E) there are too many uncontrollable variables.

Question 10

The corporation's task environment

A) encompasses the physical working areas of the organization.
B) includes those elements or groups within an organization's industry.
C) is an advisory committee to top management.
D) is an accounting of the many jobs within an organization.
E) is the job requirement specification listing necessary skills and abilities.

Question 11

The societal environment includes the economic,technological,political-legal,and sociocultural forces.

Question 12

Which of the following is not an element of the organization's task environment?

A) local communities
B) trade associations
C) governments
D) technological developments
E) special interest groups

Question 13

Environmental scanning is an overarching term encompassing the monitoring,evaluation,and dissemination of information relevant to the organizational development of strategy.

Question 14

All of the following are technological breakthroughs already having a significant impact on many industries EXCEPT

A) growing health consciousness.
B) alternative energy sources.
C) genetically altered organisms.
D) smart, mobile robots.
E) virtual personal assistants.

Question 15

A corporation's task environment is typically focused on the industry within which the firm operates.

Question 16

Which societal force includes demographic trends?

A) political-legal forces
B) labor forces
C) economic forces
D) technological forces
E) sociocultural forces

Question 17

Industry analysis was popularized by Michael Porter.

Question 18

Which environment was generally perceived by business people to be something to exploit,not conserve,until the twentieth century?

A) the task environment
B) the natural environment
C) the internal environment
D) the societal environment
E) the external environment

Question 19

Which of the following is not one of the eight current sociocultural trends mentioned in the text?

A) increasing environmental awareness
B) growth of the seniors market
C) decline of the mass market
D) wage/price controls
E) impact of Generation Y boomlet

Question 20

Externalities have been identified by governments but firms have not been forced to deal with the side effects of their activities.

Question 21

The origin of competitive advantage lies in the ability to identify and respond to environmental change well in advance of competition.

Question 22

List eight current sociocultural trends in the United States that are transforming North America and the world.

Question 23

According to Porter,the corporation is most concerned with

A) the intensity of competition within its industry.
B) the aggregate level of demand for a product line.
C) a market's position on its life cycle.
D) the amount of pressure from the societal environment.
E) the level of government action in an industry.

Question 24

According to Porter's model,a strong or high force is likely to reduce profits and can be regarded as a(n)

A) benefit.
B) opportunity.
C) advantage.
D) threat.
E) risk.

Question 25

One of the sociocultural variables in the societal environment is the changing household composition.

Question 26

Which is the largest age group of the current generations in all developed countries?

A) Baby Boomers
B) Woofies
C) Silent Generation
D) Gen X
E) Gen Y

Question 27

According to Porter,the collective strength of the interaction of potential entrants,buyers,substitutes,suppliers,firm rivalry,and other stakeholders determine

A) the level of government action in an industry.
B) the probable industry attractiveness and business strength position.
C) the ultimate profit potential in the industry measured in terms of long-run return on invested capital.
D) the aggregate level of demand for a product line.
E) the amount of pressure from the societal environment.

Question 28

An example of an economic variable in the societal environment is interest rates.

Question 29

A multi-national corporation is a company with significant assets and activities in multiple countries.

Question 30

In addition to Porter's Five Forces,another force added in the text is

A) bargaining power of unions.
B) other stakeholders.
C) threat of prospects.
D) threat of shareholders.
E) bargaining strength of employees.

Question 31

Industry analysis is primarily concerned with a corporation's

A) societal environment.
B) task environment.
C) sociocultural environment.
D) economic environment.
E) internal environment.

Question 32

When strategic managers have a willingness to reject unfamiliar as well as negative information it is referred to as

A) strategic paralysis.
B) corporate inertia.
C) management indifference.
D) strategic myopia.
E) corporate apathy.

Question 33

Strategic myopia is the willingness to reject unfamiliar as well as negative information.

Question 34

According to Porter,seeing clothing firms such as Under Armour enter the athletic shoe industry would reflect a

A) medium bargaining power of suppliers.
B) low threat of substitutes.
C) medium bargaining power of buyers.
D) high threat of potential entrants.
E) low competitive intensity.

Question 35

The transferring of profits from a foreign subsidiary to a corporation's headquarters is known as repatriation of profits.

Question 36

The origin of competitive advantage lies in the ability to

A) gain major stockholders.
B) identify and respond to environmental change well in advance of competition.
C) launch products quickly.
D) serve customers faster.
E) create surprise for others.

Question 37

The growing health consciousness is an example of a political-legal force.

Question 38

A company with significant assets and activities in multiple countries is known as a(n)

A) multi-national corporation.
B) repatriated corporation.
C) transferable corporation.
D) duplicate corporation.
E) emancipated corporation.

Question 39

Booz & Company found that companies that are most successful at avoiding surprises had a well-defined system that integrated planning,budgeting,and business reviews.

Question 40

One of the breakthrough developments in technology is the portable information device and electronic networking.

Question 41

Which of the following is not descriptive of intense rivalry among firms?

A) slow industry growth
B) high fixed costs
C) high exit barriers
D) few competitors or competitors that are roughly equal in size and power
E) product offerings that are highly differentiated

Question 42

One of the possible barriers to entry is product differentiation.

Question 43

Which barrier to entry was demonstrated by Microsoft's development of the first widely adopted operating system (MS-DOS) for the IBM-type personal computer that gave it a significant competitive advantage over potential competitors?

A) government policy
B) access to distribution channels
C) cost disadvantages independent of size
D) capital requirements
E) economies of scale

Question 44

A company or an industry whose product works well with a firm's product and without which the product would lose much of its value is considered to be a(n)

A) complementor.
B) oligopoly.
C) strategic group.
D) industry leader.
E) staggered company.

Question 45

Intel was able to gain a significant cost advantage over its competitors in the production and sale of microprocessors because of

A) capital requirements.
B) product differentiation.
C) switching costs.
D) economies of scale.
E) access to distribution.

Question 46

Which barrier to entry uses cost advantages associated with large size?

A) rivalry among existing firms
B) switching costs
C) cost disadvantages independent of size
D) capital requirements
E) economies of scale

Question 47

Which of the following is not descriptive of a high level of bargaining power of suppliers?

A) Substitutes are readily available.
B) The product or service is unique.
C) The supplier industry is dominated by a few companies, but sells too many.
D) The purchasing industry buys only a small portion of the supplier group's goods and services.
E) Suppliers are able to integrate forward and compete directly with their present customers.

Question 48

Which barrier to entry do corporations such as P&G use to force new entrants to spend heavily to overcome existing customer loyalty?

A) rivalry among existing firms
B) switching costs
C) capital requirements
D) product differentiation
E) access to distribution channels

Question 49

According to Porter's model,a low force can enable the company to earn greater profits and can be regarded as a(n)

A) benefit.
B) opportunity.
C) advantage.
D) threat.
E) risk.

Question 50

According to Michael Porter,the weaker each of the competitive forces,the more limited companies are in their ability to raise prices and earn greater profits.

Question 51

Which of the following is not descriptive of the threat of substitute products or services?

A) Substitute products appear to be different, but satisfy the same need as another product.
B) If the cost of switching is low, substitutes may have a strong effect on an industry.
C) Identifying substitutes is relatively easy since they look similar.
D) Possible substitute products or services may not appear to be easily substitutable.
E) Substitutes limit the potential returns of an industry.

Question 52

Which of the following is not descriptive of a high level of bargaining powers of buyers?

A) Changing suppliers costs very little.
B) Alternative suppliers are plentiful because of standardization of the product.
C) The purchased product represents a high percentage of buyer's costs.
D) The buyer buys a large proportion of the seller's product or service.
E) A buyer earns high profits and is very insensitive to costs and service differences.

Question 53

A sugar company that is worried that consumers may buy artificial sweetener instead of sugar is concerned about the

A) threat of new entrants.
B) rivalry among existing firms.
C) threat of substitute products.
D) bargaining power of suppliers.
E) bargaining power of buyers.

Question 54

An industry is a group of firms producing a similar product or service.

Question 55

Porter describes the threat of new entrants.Which of the following is not descriptive of the "threat of new entrants"?

A) depends on the presence of entry barriers
B) has a desire to gain market share
C) depends on the reaction of existing competitors
D) does not impact industry attractiveness
E) brings new capacity and substantial resources

Question 56

A relationship that illustrates the term "complementor" is

A) Microsoft and Intel.
B) General Motors and Ford.
C) Hewlett Packard and Compaq.
D) Gateway and Dell.
E) America Online and CompuServe.

Question 57

When General Motors considers making its own automotive parts,Delphi Automotive Supply Company would be concerned with the

A) bargaining power of suppliers.
B) bargaining power of buyers.
C) rivalry among existing competitors.
D) threat of substitutes.
E) threat of new entrants.

Question 58

Other software companies would not compete with Microsoft based on the perceived hesitation of consumers to try new software.Which of Porter's forces does this reflect?

A) exit barriers
B) bargaining power of buyers
C) threat of substitutes
D) bargaining power of suppliers
E) rivalry among existing firms

Question 59

An entry barrier is an obstruction that makes it difficult for a company to enter an industry.

Question 60

According to Michael Porter,a high force can be regarded as a threat because it is likely to reduce profits.

Question 61

Two factors tend to determine whether an industry will be primarily multi-domestic or primarily global.One of the factors is pressure for coordination within the MNCs operating in that industry.The other factor is

A) the pressure for local responsiveness on the part of individual country markets.
B) the power of the local country governments to restrict MNC actions.
C) the need for brand management in the various MNCs operating within that industry.
D) the importance of differentiating with integrating mechanisms in regional cooperatives.
E) the likelihood of terrorist activity impacting that industry.

Question 62

Which type of international industry manufactures and sells the same products with only minor adjustments made for individual countries around the world?

A) consortium industry
B) global industry
C) indigenous industry
D) multi-domestic industry
E) worldwide industry

Question 63

In which type of international industry do corporations tailor products to the specific needs of consumers in a particular country?

A) consortium industry
B) global industry
C) indigenous industry
D) multi-domestic industry
E) worldwide industry

Question 64

What is a set of business units or firms that "pursue similar strategies with similar resources"?

A) strategic group
B) collective collaboration
C) cooperative
D) integral association
E) strategic assembly

Question 65

The strength of each of the six driving forces of industry competition varies according to the

A) effectiveness of the strategic planning.
B) stage of industry evolution.
C) capital requirements.
D) changes in the political environment.
E) amount of government regulation.

Question 66

When the pressure for coordination is strong and the pressure for local responsiveness is weak for multi-national corporations within a particular industry,the industry will tend to become

A) global.
B) consolidated.
C) multi-domestic.
D) risky.
E) indigenous.

Question 67

The need to invest huge financial resources in manufacturing facilities in order to produce large commercial airplanes creates a significant barrier to entry to any competitor for Boeing and Airbus.

Question 68

When the pressure for local responsiveness is strong and the pressure for coordination is weak for multi-national corporations in an industry,the industry will tend to become

A) global.
B) consolidated.
C) multi-domestic.
D) risky.
E) indigenous.

Question 69

NutraSweet can serve as a product substitute for sugar satisfying the same need.

Question 70

A fragmented industry is dominated by a few large firms,each of which struggles to differentiate its products from the competition.

Question 71

Describe Porter's approach to industry analysis.

Question 72

Which of the following is an example of an industry in which companies manufacture and sell the same products,with only minor adjustments made for individual countries around the world?

A) retailing
B) banking
C) tires
D) insurance
E) health care

Question 73

According to Miles and Snow,which strategic orientation is demonstrated by companies that have a limited product line and focuses on improving the efficiency of their existing operations?

A) initiators
B) reactors
C) analyzers
D) prospectors
E) defenders

Question 74

The U.S.major home appliance industry is an example of an industry

A) that has evolved from an oligopoly to a monopoly.
B) in which each company maintained a distinct product line.
C) that was once fragmented, but now is consolidated.
D) that has experienced consistent, increasing sales.
E) experiencing a successful strategy of product specialization because of product differentiation.

Question 75

Which of the following is not one of the general strategic types according to Miles and Snow?

A) initiators
B) reactors
C) analyzers
D) prospectors
E) defenders

Question 76

A buyer may be powerful when changing suppliers costs a great deal.

Question 77

Distinguish between a fragmented and consolidated industry.

Question 78

An industry dominated by a few large firms,all of which struggle with product differentiation,is known as

A) multi-domestic.
B) consolidated.
C) global.
D) indigenous.
E) worldwide.

Question 79

Governments can do little to erect barriers to entry in an industry.

Question 80

In a fragmented industry

A) no firm has large market share.
B) prices increase as new competitors enter the market.
C) economies of scale are rarely used to reduce costs.
D) companies avoid integration to further reduce costs.
E) the experience curve is ineffective in reducing costs.