Question 1

________ tracks the evolution of environmental trends, sequences of events, or streams of activities.

Accepted Answer

A)  Environmental scanning 
B)  Environmental monitoring 
C)  Environmental surveying 
D)  Competitive intelligence

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The Dodd-Frank Wall Street Reform and Consumer Protection Act require companies to disclose whether any tin, tantalum, tungsten or gold in their supply chain is connected to violent militia groups in the Congo or nine surrounding countries, including Angola, Rwanda, and Sudan. This is an example of which segment of the general environment?

Accepted Answer

A)  economic 
B)  sociocultural 
C)  political and legal 
D)  demographic

Question 4

Companies that are able to spot key trends in the environment know their business and most importantly know their

Accepted Answer

A)  suppliers. 
B)  employees. 
C)  customers. 
D)  competitors.

Question 5

Which of the following websites is not an example of one used routinely for corporate competitive intelligence gathering?

Accepted Answer

A)  Slideshare 
B)  Quora 
C)  Duolingo 
D)  YouTube

Question 6

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

Accepted Answer

A)  by shifting customers away from issues of price 
B)  by consolidating the marketing message that consumers use to make a purchase decision 
C)  by making competitors in cyberspace seem less equally balanced 
D)  by highlighting unique selling advantages of a firm

Question 7

Which of the following is not a correct usage of the SWOT framework?

Accepted Answer

A)  build on its strengths 
B)  remedy the weaknesses or work around them 
C)  take advantage of the opportunities presented by the environment 
D)  protect the firm from environmental weaknesses

Question 8

Genetic engineering has had a positive impact on the pharmaceutical industry. This is an example of which type of general environmental trend?

Accepted Answer

A)  economic 
B)  demographic 
C)  technological 
D)  political and legal

Question 9

Which of the following statements about strategic groups is false?

Accepted Answer

A)  Two assumptions are made: (1) no two firms are totally different, and (2) no two firms are exactly the same. 
B)  Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups. 
C)  Strategic groups help chart the future directions of firm strategies. 
D)  Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole.

Question 10

The five-forces model helps to determine both the nature of competition in an industry and the profit potential for the industry.

Accepted Answer

A) True 
 B)False

Question 11

Salemi Industries launched Cell Zone unsuccessfully in 2005 because it did not understand the market demand for its new product. This is an example of

Accepted Answer

A)  vision statement evaluation. 
B)  assessing internal strengths. 
C)  environmental scanning. 
D)  mission statement evaluation.

Question 12

The aging of the population, changes in ethnic composition, and effects of the millennial generation are ________ changes.

Accepted Answer

A)  macroeconomic 
B)  global 
C)  sociocultural 
D)  demographic

Question 13

Banks and airlines are examples of two industries that track competitor offers continually. This is called the process of gathering

Accepted Answer

A)  consumer responses. 
B)  competitive intelligence. 
C)  past decisions. 
D)  mainline information.

Question 14

Environmental analysis requires continual questioning of all these assumptions except

Accepted Answer

A)  a priori ideas about the structure of the relevant industry. 
B)  continual updating of environmental knowledge. 
C)  presuppositions about who is and is not a competitor. 
D)  biases about how to make money in the industry.

Question 15

Larger numbers of women entering the work force since the early 1970s is an example of

Accepted Answer

A)  demographic changes. 
B)  political and legal environmental changes. 
C)  sociocultural changes. 
D)  technological developments.

Question 16

Which of the following firms would likely pose the least competitive threat?

Accepted Answer

A)  a firm in the same industry and in the same strategic group 
B)  a competitor to your product where a high switching cost exists 
C)  a firm that produces substitute goods to your product line 
D)  a firm in the same industry and in the nearest strategic group looking to join your group

Question 17

Environmental forecasting does not involve plausible projections about the ________ of environmental change.

Accepted Answer

A)  direction 
B)  scope 
C)  speed 
D)  lack of intensity

Question 18

Scenario planning is a useful technique for firms competing in industries characterized by ________ and ________.

Accepted Answer

A)  predictability; stability 
B)  low profit margins; stability 
C)  unpredictability; change 
D)  high profit margins; stability

Question 19

Nintendo built a security chip into its game console hardware and then licensed the right to develop games to outside firms. These firms paid a royalty to Nintendo for each copy of thegame sold. This is an example of Nintendo using ________ products.

Accepted Answer

A)  substitute 
B)  complement 
C)  unrelated 
D)  differentiated

Question 20

The bargaining power of suppliers is enhanced under which following market condition?

Accepted Answer

A)  no threat of forward integration 
B)  low differentiation of the supplier products 
C)  greater availability of substitute products 
D)  dominance by a few suppliers

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