Capstone Chap.3 The External Assessment

15) 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

18) What is the first step in designing an External Factor Evaluation (EFE) Matrix? A) Identifying key external factors 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

21) 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

3) External audits attempt to identify key variables that offer ________ responses. A) actionable B) authoritative C) profitable D) strategic E) terminal

A

9) 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.

A

10) Erosion of the U.S. manufacturing base is reflected in the sharp increase in labor union membership in the last decade.

B

14) 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

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

B

1) 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

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

C

12) What is NOT one of Michael Porter's five competitive forces? A) Potential entry of new competitors B) Rivalry among competing firms C) Bargaining power of unions D) Bargaining power of suppliers E) Bargaining power of consumers

C

16) ________ 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) Identifying potential moves a competitor might make that would endanger a firm's position in the market

C

19) 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

2) 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

20) When using External Factor Evaluation (EFE) Matrix, what is done after multiplying each factor's weight by its rating to determine a weighted score? A) Identifying key external factors B) Summing the weighted score for each competitor C) Summing the weighted scores for each variable to determine the total weighted score for the organization D) Drawing the horizontal and vertical lines for the matrix E) Determining the preferred strategic factor

C

23) 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

24) What is the range for a firm's total weighted score in a Competitive Profile Matrix (CPM)? A) 0 to 4 B) 0 to 5 C) 1 to 4 D) 1 to 5 E) 0 to 10

C

5) The Industrial Organization (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

7) Many economists say the current rash of trade constraints will make it ________ for global economic growth. A) easier B) impossible C) harder D) more likely E) less time-consuming

C

13) 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

22) The weights and total weighted scores in a Competitive Profile Matrix (CPM) have the same meaning the weights and total weighted scores in a A) Comprehensive Profile Analysis (CPA). B) Dynamic Trends Analytical Framework. C) Porter's Five Forces Model. D) External Factor Evaluation (EFE). E) Evaluative Forces Matrix (EFM).

D

6) 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

8) A weak dollar means A) lower exports and higher imports. B) lower exports and lower imports. C) lower exports and no effect on imports. D) higher exports and higher imports. E) higher exports and lower imports

E