Chapter 2

All of the following are forces that create high rivalry within an industry EXCEPT:

fast industry growth.

Competitor analysis focuses on:

firms with which the company competes directly.

The political/legal segment of an environment represents:

how organizations and governments mutually try to influence each other.

Which of the following explains, in part, why rivalry among McDonald's, Wendy's, and Burger King is intense?

These companies are trying to find ways to differentiate their products.

The likelihood of entry of new competitors is affected by ______ and ______.

barriers to entry; expected retaliation of current industry organizations

Product differentiation refers to the

belief by customers that a product is unique.

New entrants to an industry are more likely when:

product differentiation in the industry is low.

The highest amount a firm can charge for its products is most directly affected by:

the cost of substitute products.

Suppliers are powerful when:

they offer a credible threat of forward integration.

A competitor analysis includes all of the following about competitors EXCEPT:

traditions.

One popular approach to taking care of the physical environment is:

producing and selling additional green products.

The next critical technological opportunity for organizations is predicted to be:

wireless communications.

Environmental scanning would be most important for which of the following organizations?

A web design company catering to small businesses

Which of the following is NOT an activity used in the external environmental analysis process?

Decrypting

Which of the following is NOT an entry barrier to an industry?

Bargaining power of suppliers

Media content has moved from paper, tape, and film to a digital world based on Internet technology. From the perspective of the five forces model, which force is most relevant here?

Substitutes

Which of the following would NOT be identified in an analysis of the economic portion of the general environment?

The ability of Ford to issue new debt in light of its recent financial performance

All of the following are ethical sources of data for external analysis EXCEPT:

a competitor's confidential memos

An industry is defined as:

a group of firms producing products that are close substitutes.

Once a firm has determined its competitors' future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop:

a response profile

All of the following are aspects of the political/legal segment of the general environment EXCEPT:

attitudes and values.

Acme Valves, Inc., has been a successful player in the oil field supply industry in the last 15 years. Acme maintained its strategy and product characteristics over this time period. However, the company has experienced declines in sales and profits over the last four quarters. The CEO of Acme should

conduct an analysis of the external environment.

In analyzing the demographic segment of the general environment, one typically examines all of the following factors EXCEPT:

cultural values.

ompetitor intelligence could ethically come from all of the following EXCEPT

eavesdropping.

Because of threats and risks in the global environment, some firms choose to take a more cautious approach by:

focusing on global niche markets

Firms within strategic groups:

follow similar strategies across certain dimensions.

When analysts develop feasible projections of future events and how quickly they will occur based on observed changes and trends, they are: engaged in

forecasting.

The ______ environment is composed of dimensions in the broader society that can influence an industry and the firms within it.

general

The three parts of the external environment that affect a firm's strategic actions are:

general, industry, and competitor.

Exit barriers to a firm include all of the following EXCEPT:

generic assets

The recent joint ventures formed by BP with Russian and Indian partners show the importance of the ______ segment of the general environment in those countries that BP and other oil firms have to manage when contending with scarce resources.

global

An analysis of the economic segment of the external environment would include all of the following EXCEPT:

income distribution.

The technological segment of environmental analysis includes:

institutions and activities involved with creating new knowledge and translating that knowledge into new outputs.

According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT:

low barriers to entry.

According to the five forces model, an unattractive industry would include all of the following characteristics EXCEPT:

low supplier power due to commodity inputs.

The competition within each strategic group is

more intense than the competition between strategic groups.

A general environmental analysis can be expected to produce all of the following EXCEPT:

objective answers

As customers come to believe that a firm's product is unique, this allows the firm to:

obtain loyal customers.

When consumers change mobile phone and data service providers, they may be required to maintain service with the provider for a specified time period. This is an example of a:

one-time cost customers incur when buying from a different supplier.

Global warming and energy consumption trends are aspects of the ______ segment of the general environment that firms should monitor.

physical

BP, in response to the Deepwater Horizon oil spill, expected increased scrutiny from which of the following segments of the general environment?

political/legal

Economies of scale refers to the fact that as the:

quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases.

The use of the Internet by Netflix to collect data on customer preferences is an example of:

scanning.

When rival firms compete aggressively by trying to attract competitors' customers, this might be an indication of:

slow industry growth.

An analysis of society's attitudes and values would be conducted when studying the ______ segment of the general environment.

sociocultural

Coca-Cola and PepsiCo have been accused of contributing to the obesity problem in the United States. This accusation comes from the ______segment of the general environment.

sociocultural

The environmental segments that make up the general environment typically will NOT include:

substitute products or services.

Buyers are powerful when:

switching costs are low

Understanding how new knowledge can develop new products, processes, or materials is a result of analyzing the ______ segment of the general environment.

technological

Competitor intelligence is:

the data that the firm gathers to understand competitors' objectives, strategies, assumptions, and capabilities.

The economic environment refers to:

the nature and direction of the economy in which a firm competes or may compete.

of the following are implications of strategic groups EXCEPT:

the strength of the five forces is the same across strategic groups.

The threat from substitutes is high when:

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