Strat Midterm Chapter 2
the political/legal segment of an environment represents
how organizations and governments mutually try to influence each other
Counterfeiting goods and exporting them from China is
unethical and illegal
Product differentiation refers to the
belief by customers that a product is unique
all of the following are forces that create high rivalry within an industry EXCEPT
fast industry growth
for a restaurant business dependent on drive-thru customers, the major cost disadvantage independent of scale would be if
favorable locations are not available
Competitor analysis focuses on
firms with which the company competes directly
One popular approach to taking care of the physical environment is
producing and selling additional green products
The large amount of advertising by firms such as Procter & Gamble and Colgate-Palmolive is an example of what kind of barrier to entry?
product differentiation
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
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
a competitive analysis includes all of the following about competitors EXCEPT
traditions
An analysis of income distribution would include all of the following EXCEPT
wage differentials between male and female employees working for a large manufacturer
Global warming and energy consumption trends are aspects of the (blank) segment of the general environment that firms should monitor.
physical
an industry is defined as
a group of firms producing products that are close substitutes
Which of the following is NOT an entry barrier to an industry?
bargaining power of suppliers
suppliers are powerful when
they offer a credible threat of forward integration
The next critical technological opportunity for organizations is predicted to be
wireless communications
Which of the following represents a competitive intelligence practice that is both legal and ethical?
An executive attends a trade show solely to obtain a competitor's brochures, listen to sales pitches, and ask questions about the competitor's products
Circuit Inc. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component that is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely?
Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes
Which of the following pairs of companies would be least likely to be examined together as part of competitive analysis
Netflix and Microsoft
which of the following would be an example of the application of the next major technological opportunity for organizations?
SpaceX's reusable space vehicle
characteristics of the current economic segment include all of the following EXCEPT
a clear understanding of future economic opportunities and threats
All of the following are ethical sources of data for external analysis EXCEPT
a competitor's confidential memos
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
environmental scanning would be most important for which of the following organizations
a web design company catering to small businesses
DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey. Although DWK is selling some of the products over the Internet, in order to gain economies of scale the products must be sold in retail outlets as well. The main barrier to entry DWK is likely to encounter here is
access to distribution channels
How is consolidation among fuel providers serving airport facilities viewed in the five forces model of competition?
as an increase in the bargaining power of suppliers of a critical input
Which of the following intelligence-gathering techniques is most likely to be legal and ethical?
attending trade show presentations given by a competitor's employees
all of the following are aspects of the political/legal segment of the general environment EXCEPT
attitudes and values
The likelihood of entry of new competitors is affected by (blank) and (blank)
barrier to entry; expected retaliation of current industry organizations
blood banks are highly dependent on donors. In the terminology of industry analysis, which statement about donors is accurate?
blood donors are suppliers and are powerful because of the critical nature of what they provide to the blood bank
the communications industry is broadly defined as encompassing all of the following EXCEPT
book retailers
Applications developed for iPhones make the phone more valuable to iPhone users. App developers are (blank) to Apple.
complementors
Acme Valves, Inc., has been a successful player in the oil field supply industry in the last 15 years. Acme maintained its traditional strategy and product characteristics over this time period. But, Acme 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
which of the following is NOT an activity used in the external environment analysis process
decrypting
competitor intelligence could ethically come from all of the following EXCEPT
eavesdropping
The US Hispanic market is the third-largest "Latin American" economy behind Brazil and Mexico. This impacts the (blank) aspect of demographic segment analysis
ethnic mix
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 (blank) 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 competitors
Exit barriers to a firm include all of the following EXCEPT
generic assets
New Jersey and New York have the highest state taxes in the United States. They also have high ratios of people moving out compared to people moving into the state. This impacts the (blank) aspect of demographic analysis.
geographic distribution
The recent joint ventures formed by BP with Russian and Indian partners show the importance of the (blank) segment of the general environment that BP and other integrated oil firms have to manage when contending with scarce resources.
global
the observation that china reached production overcapacity in 2015, and has a glut of extra cars, is an aspect of the (blank) segment of the general environment
global
The Department of Defense buys aircraft from U.S. companies for national security reasons. This is an example of a (blank) barrier to entry.
government policy
An owner of a stable of racehorses has been earning below-average returns for more than 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of
high barriers to exit
An analysis of the economic segment of the external environment would include all of the following EXCEPT
income distribution
Customer loyalty programs such as airline frequent-flyer miles are an attempt to
increase customers' switching costs
All of the following are examples of efforts by firms to address the physical segment of the general:
increase in hiring of women and minorities at Microsoft
The technological segment of environmental analysis includes
institutions and activities involved with creating new knowledge and translating that knowledge into new outputs
The concepts of Guanxi, Wa, and Inhwa all convey the general idea of:
interpersonal relationships
Mighty Green, a residential lawn chemical manufacturer, is committed to gaining market share in its industry. Mighty Green
is likely to raise the level of competitive rivalry in the industry
After Amazon lowered the price on its tablets, Samsung eventually lowered the price on its tablets. Samsung needed to do this because
it is in the same strategic group
The aircraft industry has long been dominated by two large aircraft manufacturers, Boeing and Airbus. The demand for major aircraft is low, and Boeing and Airbus aggressively compete for orders from airlines. What effect will these conditions have on the domestic airline industry?
it will make the airline industry more attractive because of decreased supplier power
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
a manufacturer of washing machines has expanded its plant and has created excess capacity, just as the general economy has taken a downturn. the company is likely to
offer rebates and incentives for customers who purchase washing machines
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
Green design, sustainable packaging, waste management, and energy efficiency are aspects of the (blank) segment of the general environment that companies have sought to address with environmental sustainability initiatives
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 Obama administration sought to pursue policies that would
reduce the amount of work US companies outsource to firms in other nations
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 (blank) 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 form the (blank) segment of the general environment
sociocultural
the environmental segments that make up the general environment typically will NOT include
substitute products or services
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
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 (blank) segment of the general environment.
technological
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
Which of the following, identified in an analysis of the general environment, is an opportunity for an entrepreneur who wishes to open a business providing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people?
the average age of the population in his community is high
Aardvark Corp. has three products. Two products together make up two-thirds of revenues and constitute 50 percent of company profits. Aardvark's third product makes up one-third of sales. With profitability far above the industry average, this product is responsible for one-half of Aardvark's profits. Which of the following statements regarding assessment of the general environment is accurate for Aardvark?
the company should monitor the general environment for changes that might affect the revenue and profitability of all products
High-level maintenance on aircraft is performed by the manufacturer. This service after the sale means that in the aircraft industry
the competitive rivalry in the industry is severe
A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for the project. Which of the following statements is most likely to be true?
the cost of the marble will be expensive because of the bargaining power of the supplier
Competitor intelligence is
the data that the firm gathers to understand competitors' objectives, strategies, assumptions, and capabilities
Clarissa is a sales representative for a large pharmaceutical firm. While calling on one of her major clients, the purchasing director of a hospital, the client told her confidential information that a sales representative from a competing firm had passed on to him. The information completely contradicts Clarissa's firm's understanding of the competitor's business strategy and would allow Clarissa's employer to gain many of the competitor's clients. What ethical implications may result from this situation?
the ethical dilemma here is the right of competitors not to reveal certain information
demographic changes include variations in income distribution. Which of the following statements is true?
the general loss in real income has been somewhat offset by the increase in dual-career couples
the economic environment refers to
the nature and direction of the economy in which a firm competes or may compete
Golden Lotus, an exercise club targeting healthy individuals over 50, is located in a fast-growing city in the Southwest. Which of the following factors that may have an effect on the success of Golden Lotus is the most directly controllable by the company?
the power of the customers/buyers
In a suburban community outside a city in Alabama, a retail store opened that specialized in dancewear for children and adults. It was moderately successful for five years until the local newspaper published an exposé that scanty lingerie stocked in the back of the store's showroom was selling briskly to a certain clientele. Afterward, the store lost most of its customers and nearly closed. Which segment of the environment did the store owners fail to take into account when they began selling the lingerie?
the sociocultural segment
All 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
the threat from substitutes is high when
the substitute product's price is lower than the industry product's price