Chapter 2 4970

Which of the following is NOT an activity used in the external environmental analysis process? -Scanning -Decrypting -Monitoring -Assessing

-Decrypting

To cope with often ambiguous and incomplete environmental data and to increase understanding of the general environment, firms complete an _____ environmental analysis. This analysis has four parts: ____, ____, _____, and _____

-external -scanning, monitoring, forecasting, and assessing

An analysis of the _____ environment focuses on environmental trends and their implications, an analysis of the _____ environment focuses on the factors and conditions influencing an industry's profitability potential, and an analysis of _______ is focused on predicting competitors' actions, responses, and intentions.

-general -industry -competitors

An _______ is a group of firms producing products that are close substitutes.

-industry

_______ ______ is the set of factors that directly influences a firm and its competitive actions and responses: the threat of new entrants, the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competing firms. -the interactions among these five factors determine an industry's profitability potential; in turn, the industry's profitability potential influences the choices each firm makes about its competitive actions and responses.

-industry environment

According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT: -low barriers to entry. -suppliers and buyers with little bargaining power. -a moderate degree of rivalry among competitors. -few good product substitutes.

-low barriers to entry.

According to the five forces model, an unattractive industry would include all of the following characteristics EXCEPT: -low economies of scale needed for new firms to enter. -low supplier power due to commodity inputs. -high threat of substitute products due to a large number of low-cost alternatives. -high bargaining power of buyers due to low switching costs.

-low supplier power due to commodity inputs.

When _______, analysts observe environmental changes to see if an important trend is emerging from among those spotted through scanning. -firm's ability to detect meaning in environmental events and trends. Effective monitoring requires the firm to identify important stakeholders and understand its reputation among these stakeholders as the foundation for serving their unique needs.

-monitoring

A set of firms emphasizing similar strategic dimensions and using a similar strategy is called a _____ _____.

-strategic group

Suppliers are powerful when the industry is dominated by a few large companies, no satisfactory substitutes are available, the selling industry is relatively more concentrated than the purchasing industry, or switching costs are high. -True -False

-true

Consolidation among fuel providers serving airport facilities is viewed in the five forces model of competition as a(n): -reduction of the airlines' ability to benefit from economies of scale. -increase in switching costs because the airlines have no choice but to use jet fuel and other oil products. -increase in the bargaining power of suppliers of a critical input. -increase in the intensity of rivalry among airlines for scarce resources.

-increase in the bargaining power of suppliers of a critical input.

The threat from substitutes is high when: -switching costs are high. -the substitute product's price is lower than the industry product's price. -the quality of the substitute product is lower than the quality of the industry's product. -the substitute product stimulates new process innovations within the industry.

-the substitute product's price is lower than the industry product's price.

______ entails the study of all segments in the general environment. -critically important to the firms' efforts to understand trends in the general environment and to predict their implications. -firms identify early signals of potential changes in the general environment and detect changes that are already under way.

-Scanning

When ______, the objective is to determine the timing and significance of the effects of environmental changes and trends that have been identified.

-assessing

How companies gather and interpret information about their competitors is called ______ analysis. -complements the insights provided by studying the general and industry environments.

-competitor

In a ______ analysis, the firm seeks to understand the following: -What drives the competitor, as shown by its future objectives. -What the competitor is doing and can do, as revealed by its current strategy. -What the competitor believes about the industry, as shown by its assumptions. -What the competitor's capabilities are, as shown by its strengths and weaknesses.

-competitor

-The _______ segment is concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution. -The _____ environment refers to the nature and direction of the economy in which a firm competes or may compete. -The ______/_____ segment is the arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding interactions among nations as well as between firms and various local governmental agencies. -The _______ segment is concerned with a society's attitudes and cultural values. Because attitudes and values form the cornerstone of a society, they often drive demographic, economic, political/legal, and technological conditions and changes. -The __________ segment includes the institutions and activities involved in creating new knowledge and translating that knowledge into new outputs, products, processes, and materials. -The _____ segment includes relevant new global markets and their critical cultural and institutional characteristics, existing markets that are changing, and important international political events. -The sustainable ______ environment segment refers to potential and actual changes in the physical environment and business practices that are intended to positively respond to those changes in order to create a sustainable environment.

-demographic -economic -political/legal -sociocultural -technological -global -physical

An attractive industry is one that is characterized by high entry barriers, suppliers and buyers with strong bargaining power, low threats from substitute products, or low rivalry among firms. -true -false

-false

When f______, analysts develop feasible projections of what might happen, and how quickly, as a result of the events and trends detected through scanning and monitoring.

-forecasting

______ _______: is composed of dimensions in the broader society that influence an industry and the firms within it. -We group these dimensions into seven environmental segments: demographic, economic, political/legal, sociocultural, technological, global, and sustainable physical. -a company seeks to recognize trends in each segment of the general environment and then predict each trend's effect on it.

-general environment

-______ of ____ entrants: is important because they can threaten the market share of existing competitors -_____ power of _____ A supplier group is powerful when: It is dominated by a few large companies and is more concentrated than the industry to which it sells. Satisfactory substitute products are not available to industry firms. Industry firms are not a significant customer for the supplier group. Suppliers' goods are critical to buyers' marketplace success. The effectiveness of suppliers' products has created high switching costs for industry firms. It poses a credible threat to integrate forward into the buyers' industry. Credibility is enhanced when suppliers have substantial resources and provide a highly differentiated product. -_____ power of ____ Customers (buyer groups) are powerful when: They purchase a large portion of an industry's total output. The sales of the product being purchased account for a significant portion of the seller's annual revenues. They could switch to another product at little, if any, cost. The industry's products are undifferentiated or standardized, and the buyers pose a credible threat if they were to integrate backward into the sellers' industry. -____ of _____ products: are goods or services from outside a given industry that perform similar or the same functions as a product that the industry produces. -______ of ____ among competitors: when a firm is challenged by a competitor's actions or when a company recognizes an opportunity to improve its market position.

-threat; new -bargaining; suppliers -bargaining; buyers -threat; substitute -intensity; rivalry

The five competitive forces model expands the arena of competitive analysis beyond direct competitors (i.e., rivals) to include buyers and suppliers who may also be a source of competition. -true -false

-true