Strategic Management Test 2 - Chapter 4 - The External Environment

A. The accelerating interest of consumers and employers in quality of life issue

A profound social change in the recent years has been A. The accelerating interest of consumers and employers in quality of life issue B. The decelerating interest of foreigners seeking jobs and immigrant status in the U.S. C. The remarkably high placement of U.S. high school education in math and science in the world D. The global warming effect

A. Social factors

The considerations involving the beliefs, values, attitudes and opinions of those in a firm's environment represent the ______. A. Social factors B. Personal factors C. Economic factors D. Political factors

A. Technological forecasting

The quasi-science of anticipating environmental and competitive changes and estimating their importance to an organizations operation refers to A. Technological forecasting B. Ecology C. Industry environment D. Operating environment

D. Ecological factors

The remote external environment includes: A. Creditors B. Industry factors C. Employee D. Ecological factors

D. A definition of the industry in global terms

The starting point for industry definition is A. The firm's mission statement B. A focus group session with the firm's top managers C. The federal government's definition of the industry D. A definition of the industry in global terms

B. 5

The state of competition is an industry, according to Porter, depends on ______ basic forces. A. 3 B. 5 C. 8 D. 2

B. Demographics

This term refers to descriptive characteristics that can be used to differentiate groups of present or potential customers. A. Geographics B. Demographics C. Buyer behaviors D. Psychographics

C. Pollution

Threats to life-supporting ecology caused principally by human activities is an industrial society are commonly referred to as A. Technology B. Co-efficiency C. Pollution D. Product differentiation

C. Slow growth

What type of industry growth intensifies competitive rivalry? A. Fast growth B. Moderate growth C. Slow growth D. Sporadic growth

B. Reduced advertising

Which one of the following is NOT a tactic used by competitors when they jockey for position? A. Price competition B. Reduced advertising C. Advertising slugfests D. Product introduction

B. Advertising price-cutting

Which one of the following is a tactic typically used by firms to jockey for position? A. Economies of scale B. Advertising price-cutting C. Access to distribution D. Product withdrawal

A. Psychographic information

While developing the customer profile, it is important to include: A. Psychographic information B. Market share C. Experience D. Management image

A. Industry evolution creates industries within industries

Defining industry boundaries is a very difficulty task because A. Industry evolution creates industries within industries B. Industries are becoming very narrow C. Industries do not evolve over time D. Industries remain static over time

A. Who are our customers?

Designing viable strategies for a firm requires a thorough understanding of the firm's industry and competition. Which one of the following is NOT a question the firm's executives need to address? A. Who are our customers? B. What are the boundaries of the industry? C. What is the structure of the industry? D. Which firms are our competitors?

D. Competition

Designing viable strategies for a firm requires a thorough understanding of the firm's: A. Earnings B. Growth rate C. Market share D. Competition

D. Supplier power

Differentiation of inputs represents a determinant of A. Entry B. Rivalry C. Buyer power D. Supplier power

D. Availability of skills

Four factors are mentioned which affect a firm's access to needed personnel. One of these factors is: A. Geographic location B. Employee benefits C. National employment rates D. Availability of skills

B. Jockeying for position

Rivalry among existing competitors takes the familiar form of: A. Substitute products B. Jockeying for position C. Positioning the company D. Influencing the balance

A. Subject to trends

Substitute products that deserve the most attention strategically are those that are: A. Subject to trends B. Produced by industries earning low profits C. Most expensive to produce D. Slow coming into play

C. Industry

Supplier power is an example of a factor that falls within the _________ environment. A. Economic B. Operating C. Industry D. Remote

C. Raising prices

Suppliers can exert bargaining power on participants in an industry by: A. Stabilizing their cost base B. Lowering prices C. Raising prices D. Increasing the quality of services

D. Remote

Technological factors are a part of a firm's ______ environment. A. Industry B. Operating C. Economic D. Remote

A. Remote

The ______ environment compromises factors that originate beyond and usually irrespective of, any single firm's operating situation. A. Remote B. Industry C. Operating D. Internal

A. It earns low profits

A buyer group is powerful if: A. It earns low profits B. The industry's product is important to the quality of the buyer's products or services C. The industry's product saves the buyer money D. It is not concentrated

A. The buyers pose a credible threat to make the industry's product

A buyer group is powerful if: A. The buyers pose a credible threat to make the industry's product B. The industry product saves the buyer money C. It earns high profit D. The industry has high exit barriers

A. Very easy

In the economists' "perfectly competitive" industry jockeying for position is unbridled and entry to the industry is A. Very easy B. Prohibited by regulations C. Moderated due to national security concerns D. Very hard

B. Ecology

The term ______ refers to the relationships among human beings and other living things and the air, soil and water that supports them. A. Pollution B. Ecology C. Operating environment D. Remote environment

B. Demand higher quality

Customers have the power to: A. Raise prices B. Demand higher quality C. Lower service quality D. Coordinate competitors

C. Psychographics

Purchasing behavior is often better predicted by: A. Geographics B. Demographics C. Psychographics D. Reputation

A. Competitor profile

A firm can more accurately forecast both its long-term and short-term growth and profit potential by developing its: A. Competitor profile B. Financial position C. Technological innovation D. Vendor profile

A. Political, technological, economic and social

A firm's external environment includes a remote sector, industry sector and an operating sector. The remote sector includes which of the following categories? A. Political, technological, economic and social B. Political, supplier power, economic and labor C. State government, production, social and economic D. Mission, company profile and competition

B. It is not obligated to contend with other products for sale to the industry

A supplier group is powerful if: A. It is not concentrated B. It is not obligated to contend with other products for sale to the industry C. Raw materials are the major input cost D. Its product is not unique

B. Its product is unique

A supplier group is powerful if: A. Its product is undifferentiated B. Its product is unique C. Its market is unique D. It must contend with other products

B. Customer profile

A valuable result of task environment analysis with respect to geographic, demographic, psychographic and buyer-behavior factors is called: A. Market share analysis B. Customer profile C. Competitive edge D. Consumer/surveys

B. Threat of entry

Access to distribution channels is a major source of which competitive force? A. Bargaining power of buyers B. Threat of entry C. Threat of substitute products D. Bargaining power of suppliers

A. Eco-efficiency is insular

All of these are key characteristics of eco-efficient corporations EXCEPT A. Eco-efficiency is insular B. Eco-efficient firms are proactive C. Eco-efficiency is designed in D. Flexibility is imperative for eco-efficient strategy implementation

C. Growth rate changes

As an industry matures, its: A. Growth rate is unchanged B. Profits are higher C. Growth rate changes D. New firms enter

C. Cost disadvantages independent of size

Assets purchased at preinflation prices is an example of: A. Product differentiation B. Capital requirements C. Cost disadvantages independent of size D. Distribution

C. Exploit new markets

Awareness of technological changes in its industry helps the firm to: A. Interpret new regulations B. Act slowly and carefully C. Exploit new markets D. Forecast social change

C. Can include customer loyalty

Barriers to entry: A. Can be cyclical B. Can involve the legal constraints leveling the playing field C. Can include customer loyalty D. Are not important to small firms

A. Entry

Brand identity is a determinant of which of these forces driving industry competition? A. Entry B. Rivalry C. Buyer power D. Supplier power

B. Cleaning up its previous environmental damage

Business is now being held responsible for: A. Using only underground dumping sites B. Cleaning up its previous environmental damage C. Municipal sewer systems D. Ensuring that a "thermal blanket" is created

C. Profitability of a firm

Collectively, competitive forces determine the ultimate: A. Growth of a firm B. Survival of a firm C. Profitability of a firm D. Viability of a firm

D. Eco-efficiency

Company actions that produce more useful goods and services while continuously reducing recourse consumption and pollution refers to A. Product differentiation B. Economics of scale C. Barriers to entry D. Eco-efficiency

A. Threat of new entrants

Cost disadvantages independent of size is a factor relevant to A. Threat of new entrants B. Powerful suppliers C. Jockeying for position D. Powerful buyers

A. Savings that companies within the industry achieve due to increased volume

Economies of scale in an industry refers to: A. Savings that companies within the industry achieve due to increased volume B. Declining average short run costs per unit C. Improved contractual agreements with suppliers in the near term D. Decreased barriers to entry to new firms attempting to enter the industry

C. Anti-trust laws

Encompassed in political considerations is/are: A. Social values B. Disposable income C. Anti-trust laws D. Age distribution

B. Cost disadvantage independent of size

Entrenched companies may have cost advantages not available to potential rivals. This is an example of: A. Capital requirements B. Cost disadvantage independent of size C. Economies of scale D. Government policy

B. Rivalry

Exit barriers represent a determinant of A. Entry B. Rivalry C. Buyer power D. Supplier power

C. Jockeying for position

High fixed costs is a factor in which of the five forces? A. Threat of entry B. Substitute products C. Jockeying for position D. Powerful suppliers

A. Less price sensitive

Highly profitable buyers are usually: A. Less price sensitive B. More price sensitive C. Very quantity oriented D. Not very quantity oriented

B. The quality of the product can be upgraded

If price ceilings exist, substitute products are limited, unless: A. The quality of the product can be reduced B. The quality of the product can be upgraded C. The quantities of the product available can be increased D. The product can not be differentiated

D. Salary of the chief executive and board of directors

In considering the competition's profile, a firm would NOT be concerned with which of the following? A. Market share and breadth of product line B. Facility location and production capacity C. Financial position and caliber of personnel D. Salary of the chief executive and board of directors

C. Equal in size

In intense competition, competitors are characteristically: A. Few B. Of unequal power C. Equal in size D. Not foreign

A. High

In intense competitive rivalry, barriers to exit are: A. High B. Low C. Medium D. Changing

A. High

In intense rivalry among manufacturing firms, fixed costs are: A. High B. Low C. Medium D. Less critical than variable costs

B. Diverse in origins

In intense rivalry, rivals are: A. Similar in strategies B. Diverse in origins C. Similar in personality D. Few

C. Experience

Included in a competitor profile is: A. Psychographic B. Supplier relations C. Experience D. Demographic

A. New capacity

New entrants to an industry bring: A. New capacity B. New customers C. Few resources D. Bigger margins

B. Fully capitalize on technological developments

One of the most important steps a firm can take in achieving a competitive position with regard to the eco-efficiency strategy is to A. Outsource the operations to a developing country B. Fully capitalize on technological developments C. Shift from service to manufacturing operations D. Mandate that all suppliers, distributors and customers reduce their resource consumption

B. An increasing number of women in the workforce

One of the most profound social changes in recent years is: A. The decreased population B. An increasing number of women in the workforce C. The heavy reliability of children in the workforce D. Increased education of U.S. citizens

B. Customer function

Political activity may have a significant impact on which of the following governmental functions? A. Religious orientation B. Customer function C. Manufacturer function D. Social changes

B. Legal and regulatory

Political factors define the ______ parameters within which firms must operate. A. Economic B. Legal and regulatory C. Global D. Social and cultural

B. It helps executives determine the arena in which their firm is competing

The definition of an industry's boundaries is important because A. It has to be included in the mission statement B. It helps executives determine the arena in which their firm is competing C. It has to be reported to stockholders D. It helps set the prices for the firm's products

D. Operating

The environment that is typically subject to much influence by the firm is: A. External B. Ecological C. Remote D. Operating

C. Remote, industry, operating

The external environment can be divided into various interrelated subcategories: A. Remote, political, social B. Remote, social, operational C. Remote, industry, operating D. Technological and social

B. External environment

The factors beyond the control of the firm that influence its choice of direction and action, organizational structure and internal processes refers to A. Directional strategies B. External environment C. Organizational processes D. Internal environment

A. Cost disadvantages independent of size

The learning curve effect is an example of which barrier to entry? A. Cost disadvantages independent of size B. Product differentiation C. Economies of scale D. Government policy

D. A barrier to entry

The need to invest large financial resources in order to compete creates A. Increased supplier power B. Increased buyer power C. Increased jockeying for position D. A barrier to entry

C. Affects the firm's success in resource acquisition

The operating environment: A. Also called the remote environment B. Also called the social environment C. Affects the firm's success in resource acquisition D. Does not include competitive position

C. Relative importance of purchases

The power of each supplier depends on: A. Low concentration B. Its commodity-like product C. Relative importance of purchases D. Its inability to integrate forward

B. Economic factors

When we consider the level of disposable income, we are normally considering: A. Technological factors B. Economic factors C. Political factors D. Social factors

D. Product differentiation

Which is perhaps the most important entry barrier in the soft drink, over-the-counter drugs, cosmetics, investment banking and public account industries? A. Capital requirements B. Market differentiation C. Economies of scale D. Product differentiation

C. Substitute products

Which of the following are considered competitors? A. Low substitutability products B. Firms with dissimilar scope C. Substitute products D. Uncommitted firms

C. Bargaining power of distributors

Which of these, according to Porter is NOT a force driving industry competition? A. Threat of new entrants B. Bargaining power of buyers C. Bargaining power of distributors D. Threat of substitutes

C. Government policy

Which of the following can limit or even foreclose entry to industries with such controls as license requirements? A. Equal opportunity employer B. Federal trade commission C. Government policy D. Securities and exchange commission

D. Customer credit

Which of the following factors is NOT commonly seen as fostering brand identification? A. Being first in the industry B. Product differences C. Customer service D. Customer credit

C. Market breadth

Which of the following is NOT a major barrier to entry? A. Economies of scale B. Product differentiation C. Market breadth D. Cost disadvantages independent of size

D. Stakeholders demand it

Which of the following is NOT a reason why defining an industry's boundaries is important? A. It helps executives determine the arena in which their firm is competing B. It focuses attention on the firm's competitors C. It helps executives determine key factors for success D. Stakeholders demand it

D. Price

Which of the following is a factor that does NOT foster brand identification? A. Advertising B. Product differences C. Customer service D. Price

C. Occupational Safety and Health Act

Which of these is NOT an example of a federal ecological legislation? A. Air Quality Act B. Refuse Act C. Occupational Safety and Health Act D. Resource Recovery Act

D. Economies of scale

Which of these is a determinant of entry, according to Porter? A. Presence of substitute input B. Ability to backward integrate C. Exit barriers D. Economies of scale

C. Flexibility is imperative for eco-efficient strategy implementation`

Which of these represent a key characteristic of eco-efficient corporations? A. Eco-efficient firms are reactive B. Eco-efficiency is added on C. Flexibility is imperative for eco-efficient strategy implementation D. Eco-efficiency is insular