GEB Chapter 3

One difference between CPM and 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) People make a difference. C) Innovate or evaporate. D) There is no substitute for quality and no greater threat than failing to be cost-competitive on a global basis. E) Whether it's broke or not, fix it.

A) Divestiture is essential to growth.

Standard and Poor's Industry Surveys include all of the following sections EXCEPT A) Historic Environment B) Industry Trends C) How to Analyze a Company D) Glossary of Industry Information E) Comparative Company Financial Analysis

A) Historic Environment

What is the first step in designing an EFE Matrix? A) Identifying key external factors in the industry B) Summing the weighted score for each competitor C) Calculating the sales of each competitor D) Drawing the horizontal and vertical lines for the matrix E) Determining four competitors

A) Identifying key external factors in the industry

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

A) Russia

Unpublished sources of external strategic information include all of the following EXCEPT A) abstracts B) customer surveys C) market research D) speeches at professional and shareholders' meetings E) conversations with stakeholders

A) abstracts

The Internet has made it _______ for firms to gather, assimilate, and evaluate information. A) easier B) harder C) more expensive D) less clear-cut E) more time-consuming

A) easier

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

A) impossible.

Market commonality can be defined as A) the number and significance of markets that a firm competes in with rivals. B) the number and significance of points in common a firm has with its rivals. C) the extent to which the type of a firm's internal resources are comparable to a rival. D) the extent to which the amount of a firm's internal resources are comparable to a rival. E) none of the above

A) the number and significance of markets that a firm competes in with rivals.

A total weighted score of _______ in an EFE Matrix indicates that the firm's strategies are NOT capitalizing on opportunities or avoiding external threats. A) 0.0 B) 1.0 C) 2.5 D) 3.3 E) 4.0

B) 1.0

Which of the following sectors of the economy would be most impacted by technological developments? A) Forestry B) Aeronautics C) Textiles D) Metals E) Paper

B) Aeronautics

________ is NOT part of an external audit. A) Analyzing competitors B) Analyzing financial ratios C) Analyzing available technologies D) Studying the political environment E) Analyzing social, cultural, demographic and natural environment forces

B) Analyzing financial ratios

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

When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit? A) Economic B) Political C) Technological D) Competitive E) Multinational

B) Political

The process of performing an external audit needs to include A) only top level managers, as it is a planning function. B) as many managers and employees as possible. C) primarily front-line supervisors. D) between 15 to 20 managers for it to be valid. E) stockholders and external government agencies.

B) as many managers and employees as possible.

The high unemployment rate in the U.S. is an example of a(n) ________ force affecting business. A) social B) economic C) cultural D) technological E) historical

B) economic

Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to A) stay the same. B) increase. C) decrease. D) neutralize. E) fluctuate.

B) increase.

Competition in virtually all industries is ________. A) nonexistent B) intense C) never cutthroat D) easily avoidable E) insignificant

B) intense

Not all sectors of the economy are equally affected by technological developments; the ________ industry is much more volatile than the ________ industry. A) textile; communications B) pharmaceutical; forestry C) metals; electronics D) forestry; communications E) textile; pharmaceutical

B) pharmaceutical; forestry

Which of the following is not a published source of external strategic information? A) periodicals B) television programs C) journals D) reports E) directories

B) television programs

Which of the following has largely refrained from protectionist measures? A) the EU B) the U.S. C) India D) Russia E) All of the above

B) the U.S.

What is NOT one of Michael Porter's five competitive forces? A) New entrants B) Rivalry among existing firms C) Bargaining power of unions D) Bargaining power of suppliers E) Bargaining power of buyers

C) Bargaining power of unions

What level of bargaining power do consumers have when the products being purchased are standard or undifferentiated? A) Marginal B) Low C) High D) Negative E) Negligible

C) High

________ is not a basic mission of a competitive intelligence program. A) Providing a general understanding of an industry B) Providing a general understanding of a company's competitors C) Identifying industry executives who could be hired by the firm D) Identifying areas in which competitors are vulnerable and assessing the impact strategic actions would have on competitors E) Identifyin

C) Identifying industry executives who could be hired by the firm

What effect do trends in the dollar's value have on companies in different industries and in different locations? A) Significant and equal B) Marginal and equal C) Significant and unequal D) Insignificant and unequal E) No significant impact

C) Significant and unequal

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 practice. 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.

Many economists say the current rash of trade constraints will make it ________ for global economic growth to recover from the global recession. A) easier B) impossible C) harder D) more likely E) less difficult

C) harder

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

The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage. A) less important than B) equally important as C) more important than D) more common than E) less common than

C) more important than

Identifying and evaluating key social, political, economic, technological and competitive trends and events comprise A) developing an effective mission statement. B) conducting an internal audit. C) performing an external audit. D) formulating strategy. E) implementing strategy.

C) performing an external audit.

Freund emphasizes that key external factors should be all of these EXCEPT A) important to achieving long-term and annual objectives B) measurable C) relatively few in number D) applicable to all competing firms E) hierarchical in the sense that some will pertain to the overall company while others will be more narrowly focused

C) relatively few in number

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

C) strategy formulation.

Americans were on the move in a population shift to _______, but the recession and housing bust nationwide has slowed migration throughout the United States. A) the Frostbelt B) the South and West C) the Northeast and Midwest D) the Midwest and South E) Canada

C) the Northeast and Midwest

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

D) 1 to 4

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

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

What happens when interest rates rise? A) Discretionary income increases B) The demand for discretionary goods increases C) Discretionary income is unchanged D) The demand for discretionary goods decreases E) Discretionary income increases and the demand for discretionary goods decreases

D) The demand for discretionary goods decreases

In general, what happens to American goods in overseas markets when there is a strong dollar? A) They are less expensive. B) They are more attractive. C) They are cheaper. D) They are more expensive. E) They are desirable.

D) They are more expensive.

The responsibilities of a director of competitive analysis include all of the following EXCEPT A) researching special issues B) disseminating information on a timely basis C) recognizing what information is important and who needs to know D) conducting corporate espionage E) analyzing data

D) conducting corporate espionage

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

Which statement about business intelligence is accurate? A) Intelligence gathering is an unethical business practice. B) Running an intelligence program requires many people. C) Running an intelligence program requires many computers and other resources. D) Collecting intelligence about competitors violates antitrust laws. E) Business intelligence is not equal to espionage.

E) Business intelligence is not equal to espionage.

All of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT A) special tariffs B) environmental protection laws C) world oil, currency, and labor markets 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