BUS 195 (CHAPTER 3)

One difference between a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) is that A) CPM includes both internal and external issues. B) the weights and total weighted scores have different meanings. C) CPM ratings range from 1 to 10. D) CPM is performed only for the company, whereas EFE is performed for both the company and its competitors. E) CPM is only used in small firms.

A) CPM includes both internal and external issues.

Which of the following is NOT a characteristic that describes the most competitive companies in America? A) Divestiture is essential to growth. B) Hire and retain the best employees and managers possible. C) Continually adapt, innovate, improve—especially when the firm is successful. D) Strive to stay cost-competitive on a global basis. E) Whether it's broke or not, fix it.

A) Divestiture is essential to growth.

In recent times, ________ perhaps has instituted the most protectionist measures by raising tariffs on most imports and subsidizing its own exports. A) Russia B) The United States C) The European Union D) India E) Switzerland

A) Russia

A ________ integration strategy is used by firms to gain control or ownership of suppliers. A) backward B) forward C) horizontal D) vertical E) vortexed

A) backward

Without assumptions, planning would be A) impossible. B) easier. C) difficult. D) inexpensive. E) intuitive.

A) impossible.

The investor relations pages of a company website ________ information about a firm. A) is a good place to start to find B) is not a reliable source of C) is only acceptable as a last resort for D) should not be used as the first place to look for E) is a waste of time when searching for

A) is a good place to start to find

A total weighted score of ________ in an External Factor Evaluation (EFE) Matrix indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry. A) 1.0 B) 4.0 C) 5.0 D) 10.0 E) 100.0

B) 4.0

If suppliers are unreliable or too costly, which of these strategies may be appropriate? A) Horizontal integration B) Backward integration C) Market penetration D) Forward integration E) Concentric diversification

B) Backward integration

Which of the following is NOT a published source of external strategic information? A) Periodicals B) Customer surveys C) Journals D) Reports E) Directories

B) Customer surveys

What is the range for a firm's total weighted score in an External Factor Evaluation Matrix? A) 0 to 4 B) 0 to 5 C) 1 to 4 D) 1 to 5 E) 0 to 10

C) 1 to 4

The critical success factors in a Competitive Profile Matrix and EFE Matrix include A) internal but not external issues. B) external but not internal issues. C) both internal and external issues. D) neither internal or external issues. E) only non-quantifiable data.

C) both internal and external issues.

A systematic and ethical process for gathering and analyzing information about the competition's activities and general trends to further a business' own goals is called A) unethical business practices. B) artificial intelligence. C) competitive intelligence. D) industrial espionage. E) competitive advantage.

C) competitive intelligence.

To perform an external audit, a company first must A) get an approval from the Securities and Exchange Commission. B) perform an internal audit. C) gather competitive intelligence and information about external trends. D) hire a consultant to develop a comprehensive strategic plan. E) all of the above

C) gather competitive intelligence and information about external trends.

Intensity of competition in lower-return industries. A) is lowest B) is nonexistent C) is highest D) is not important E) fluctuates

C) is highest

Collecting and evaluating information on competitors is essential for successful A) internal analysis. B) strategy evaluation. C) strategy formulation. D) strategy implementation. E) strategy correction.

C) strategy formulation.

The world population is expected to grow to an estimated billion in 2054. A) 6 B) 7 C) 8 D) 9 E) 10

D) 9

According to I/O theorists, which of the following contributes LEAST to firm's performance? A) Economies of scale B) Barriers to market entry C) Product differentiation D) Internal resources E) Level of competitiveness

D) Internal resources

Which state has the highest union membership rate? A) Arkansas B) Colorado C) New Hampshire D) New York E) North Carolina

D) New York

According to Porter, what is usually the most powerful of the five competitive forces? A) Potential development of substitute products B) Bargaining power of suppliers C) Bargaining power of consumers D) Rivalry among competing firms E) Potential entry of new competitors

D) Rivalry among competing firms

It is predicted that the United States will have no racial or ethnic majorities by the year A) 2035. B) 2045. C) 2055. D) 2065. E) 2075.

E) 2075.

Changes in which of the following can significantly affect firms? A) Patent laws B) Antitrust legislation C) Tax rates D) Lobbying activities E) All of the above

E) All of the above

Who are the world's longest-living people? A) Americans B) Mexicans C) Indians D) Filipinos E) Japanese

E) Japanese

The process of performing an external audit should involve A) key representatives from each stakeholder group. B) as many stakeholders as possible. C) only strategists. D) primarily strategists. E) as many managers and employees as possible.

E) as many managers and employees as possible.

All of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT A) tariffs. B) environmental regulations. C) level of defense expenditures. D) legislation on equal employment. E) population changes by race, age, sex, and level of affluence.

E) population changes by race, age, sex, and level of affluence.

A low value of the dollar means lower exports and higher imports.

FALSE

A total weighted score of 1.0 for an EFE Matrix indicates that the firm is responding in an outstanding way to existing opportunities and threats in its industry.

FALSE

An external audit focuses on identifying and evaluating trends and events within the control of management.

FALSE

Assumptions have no place in planning.

FALSE

Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.

FALSE

By 2050, the Census Bureau projects that the number of Americans age 100 and older will dramatically decrease.

FALSE

Corporate intelligence is the name for a systematic and ethical process for gathering and analyzing information about the competition's activities and general business trends to further a business's own goals.

FALSE

External audits attempt to identify key variables that offer highly intuitive responses.

FALSE

It is predicted that, by 2050, over 25 percent of the population in the United States will be 65 years or older.

FALSE

Regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix, the highest possible total weighted score for an organization is 4.0, and the lowest possible total weighted score is 0.0.

FALSE

The Fuld & Co. website explains that the term competitive intelligence is a polite way of referring to corporate espionage.

FALSE

The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage.

FALSE

The United States has been more active than other nations in protectionist measures and has engaged in many "Buy American" policies.

FALSE

The increase in high tech manufacturing base in the United States is reflected in the sharp increase in labor union membership in the last decade.

FALSE

There are now more American households consisting of married couples with children than of people living alone or with unrelated people.

FALSE

While forecasts might not be perfect, they are never wildly inaccurate.

FALSE

A characteristic that describes the most competitive companies is adopting the adage, "Whether it's broke or not, fix it"; in other words, continually strive to improve everything about the firm.

TRUE

External audits attempt to identify key variables that offer actionable responses.

TRUE

Hiring top executives from rival firms is a way companies obtain competitive intelligence.

TRUE

Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses.

TRUE

Major competitors' strengths may represent key threats.

TRUE

Political issues and stances impact strategic decisions.

TRUE

Protectionism is used by various countries around the world to safeguard their domestic industries.

TRUE

The United States is getting older and less white.

TRUE

The five major categories of variables known as external forces are: 1) economic forces, 2) social, cultural, demographic, and natural environment forces, 3) political, governmental, and legal forces, 4) technological forces and 5) competitive forces.

TRUE

U.S. households are making more and more purchases online.

TRUE

Wild guesses should never be made in formulating strategies.

TRUE

Wisconsin recently passed a law eliminating most collective-bargaining rights for the state's public-employee unions.

TRUE