Chapter 2 Strategic

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? a. The average age of the population in his community is high. b. The level of unemployment in his community is high. c. A chiropractor and two independent physical therapists are located in his community. d. The average education level of the population in his community is low.

a. The average age of the population in his community is high

The environment is composed of dimensions in the broader society that can influence an industry and the ___firms within it. a. general b. competitor c. sociocultural d. industry

a. general

The technological segment of environmental analysis includes a. institutions and activities involved with creating new knowledge and translating that knowledge into new outputs. b. the determination of when machinery will need to be replaced in a given firm. c. the need for new technology in order for a firm to gain a competitive advantage. d. places where a firm's technology will allow that firm to dominate a given market.

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

After Amazon lowered the price on Kindle e-readers, Sony eventually lowered the price on its Reader. Sony needed to do this because a. it is in the same strategic group. b. it is outside the strategic group. c. of inter-strategic group competition. d. of strategic distinctiveness

a. it is in the same strategic group.

A general environmental analysis can be expected to produce all of the following EXCEPT a. objective answers. b. recognition of environmental trends. c. identification of organizational opportunities. d. identification of organizational threats

a. objective answers.

BP, in response to the Deepwater Horizon oil spill, expected increased scrutiny coming from which of the following segments of the general environment? a. political/legal b. global c. technological d. sociocultural

a. political/legal

One popular approach to taking care of the physical environment is a. producing and selling additional green products. b. lobbying the government to reduce environmental regulations. c. making donations to the Sierra Club and other environmental organizations. d. increasing health benefits for employees.

a. producing and selling additional green products

An analysis of society's attitudes and values would be conducted when studying the general environment. a. sociocultural b. global c. demographic d. economic

a. sociocultural

The economic environment refers to a. the nature and direction of the economy in which a firm competes or may compete. b. the economic outlook of the world provided by the World Bank. c. an analysis of how the environmental movement and world economy interact. d. an analysis of how new environmental regulations will affect the U.S. economy.

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

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? a. the sociocultural segment b. the economic segment c. the demographic segment d. the political/legal segment

a. the sociocultural segment

Which of the following represents a competitive intelligence practice that is both legal and ethical? a. A firm hires a competitor's employees and asks them to share the names and addresses of business contacts from their previous company. b. 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. c. A city council member shares information about the decision process for selecting a contractor to build a new library wing with his wife, an executive with a construction firm bidding on the contract. d. A marketing manager at Smith-Phillips, Inc., sells confidential plans for the company's expansion into the Far East to a firm that is not a direct competitor

b. 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.

Characteristics of the current economic segment include all of the following EXCEPT a. general uncertainty. b. a clear understanding of future economic opportunities and threats. c. the inability of economists to provide valid and reliable predictions. d. an expanding economy in Vietnam

b. a clear understanding of future economic opportunities and threats

Environmental scanning would be most important for which of the following organizations? a. a provider of hospice services for the terminally ill b. a web design company catering to small businesses c. a neighborhood sewer and water utility d. a manufacturer of household linens

b. a web design company catering to small

All of the following are aspects of the political/legal segment of the general environment EXCEPT a. lobby groups. b. attitudes and values. c. taxation laws. d. industries chosen for deregulation.

b. attitudes and values

Which of the following is NOT an activity used in the external environmental analysis process? a. scanning b. decrypting c. monitoring d. assessing

b. decrypting

The three parts of the external environment which affect a firm's strategic actions are a. economic, political, and legal. b. general, industry, and competitor. c. industry, business, and product. d. local, national, and global

b. general, industry, and competitor.

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 aspect of demographic analysis. a. age structure b. geographic distribution c. income distribution d. ethnic mix

b. geographic distribution

The observation that China, despite a 37 percent surge in car sales in 2010, is expected to reach production ___ overcapacity by 2015 and have a glut of extra cars, is an aspect of the environment. a. demographic b. global c. physical d. technological

b. global

The concepts of Guanxi, Wa, and Inhwa all convey the general idea of a. entrepreneurial risk-taking. b. interpersonal relationships. c. the value of hard work. d. personal achievement.

b. interpersonal relationships.

Global warming and energy consumption trends are aspects of the that firms should monitor. a. technological b. physical c. sociocultural d. economic

b. physical

Which of the following would NOT be identified in an analysis of the economic portion of the general environment? a. the willingness of Chrysler's buyers to purchase large vehicles in light of an increase in oil prices b. the ability of Ford to issue new debt in light of its recent financial performance c. the ability of BMW's buyers to finance car purchases in light of a change in interest rates d. the willingness of GM buyers to purchase new vehicles in light of the threat of recession

b. the ability of Ford to issue new debt in light of its recent financial performance

Which of the following pairs of companies would be least likely to be examined together as part of competitive analysis? a. Wendy's and Taco Bell b. Sony and Apple c. Dell and Microsoft d. Coca-Cola and PepsiCo

c. Dell and Microsoft

Demographic changes include variations in income distribution. Which of the following statements is true? a. Firms are most interested in the consumers in the top 10 percent of household income. b. In general, living standards have deteriorated over time. c. The general loss in real income has been somewhat offset by the increase in dual-career couples. d. Workforce diversity is making the concept of average income obsolete

c. The general loss in real income has been somewhat offset by the increase in dual-career couples.

The communications industry is broadly defined as encompassing all of the following EXCEPT a. media companies. b. smartphone producers. c. book retailers. d. entertainment companies

c. book retailers.

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. However, Acme has experienced declines in sales and profits over the last four quarters. The CEO of Acme should a. continue with the proven strategy because its returns over the long run are important. b. focus on improving efficiency of production and cost control. c. conduct an analysis of the external environment. d. immediately begin making incremental adjustments to the traditional business strategy in an effort to improve sales.

c. conduct an analysis of the external environment

Because of threats and risks in the global environment, some firms choose to take a more cautious approach by a. avoiding global markets altogether. b. expanding only to developed countries. c. focusing on global niche markets. d. acquiring already established firms in foreign markets

c. focusing on global niche markets.

When analysts develop feasible projections of future events and how quickly they will occur based on observed changes and trends, they are engaged in a. scanning. b. monitoring. c. forecasting. d. assessing

c. forecasting

The political/legal segment of an environment represents a. the political preferences of different ethnic groups in the society. b. the technological values of different political entities in society. c. how organizations and governments mutually try to influence each other. d. the system of regulations governments at all levels place on businesses.

c. how organizations and governments mutually try to influence each other.

New entrants to an industry are more likely when a. it is difficult to gain access to distribution channels. b. economies of scale in the industry are high. c. product differentiation in the industry is low. d. capital requirements in the industry are high.

c. product differentiation in the industry is low.

The environmental segments that make up the general environment typically will NOT include a. demographic factors. b. sociocultural factors. c. substitute products or services. d. technological factors.

c. substitute products or services.

Understanding how new knowledge can develop new products, processes, or materials is a result of analyzing the ____ segment of the general environment. a. economic b. political/legal c. technological d. global

c. technological

Competitor intelligence is a. legally or illegally gained data about competitors' internal strategic processes and competitive decisions. b. strategic information gained from industrial espionage targeting international competitors. c. the data that the firm gathers to understand competitors' objectives, strategies, assumptions, and capabilities. d. illegal to gather under the Sarbanes-Oxley Act

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

An analysis of income distribution would include all of the following EXCEPT a. the purchasing power of various age groups. b. the discretionary income of various ethnic groups. c. wage differentials between male and female employees working for a large manufacturer. d. how income is distributed among regions of the United States.

c. wage differentials between male and female employees working for a large manufacturer.

Which of the following would be an example of the application of the next major technological opportunity for organizations? a. Boeing's Dreamliner b. Toyota's hybrid vehicles c. Philip Morris International's smokeless tobacco d. Amazon's Kindle

d. Amazon's Kindle

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? a. The company should monitor the general environment for changes that might affect the revenue of all products. b. The company should monitor the general environment for changes that might affect the profitability of the most profitable products. c. The company should monitor the general environment for changes that might affect the profitability of all products. d. The company should monitor the general environment for changes that might affect the revenue and profitability of all products.

d. The company should monitor the general environment for changes that might affect the revenue and profitability of all products.

All of the following are ethical sources of data for external analysis EXCEPT a. trade shows. b. a competitor's annual reports. c. a competitor's help-wanted advertisements. d. a competitor's confidential memos.

d. a competitor's confidential memos.

An industry is defined as a. a group of firms producing the same products or services. b. firms producing items that sell through the same distribution channels. c. firms that sell the same products or services to the same customer base. d. a group of firms producing products that are close substitutes

d. a group of firms producing products that are close substitutes

Which of the following intelligence-gathering techniques is most likely to be legal and ethical? a. hiring investigators to examine the competitor's trash b. entering a competitor's production plant without authorization c. redirecting a competitor's emails to one's own company d. attending trade show presentations given by a competitor's employees

d. attending trade show presentations given by a competitor's employees

Which of the following is NOT an entry barrier to an industry? a. expected competitor retaliation b. economies of scale c. customer product loyalty d. bargaining power of suppliers

d. bargaining power of suppliers

Applications developed for iPhones make the phone more valuable to iPhone users. App developers are to Apple. a. suppliers b. customers c. competitors d. complementors

d. complementors

In analyzing the demographic segment of the general environment, one typically examines all of the following factors EXCEPT a. age structure. b. ethnic mix. c. distribution of income. d. cultural values.

d. cultural values.

The U.S. Hispanic market is the third-largest "Latin American" economy behind Brazil and Mexico. This impacts the aspect of demographic segment analysis. a. age structure b. geographic distribution c. income distribution d. ethnic mix

d. ethnic mix

The recent joint ventures formed by BP with Russian and Indian partners show the importance of the segment of the general environment that BP and other integrated oil firms have to manage when contending with scarce resources. a. political/legal b. physical c. demographic d. global

d. global

An analysis of the economic segment of the external environment would include all of the following EXCEPT a. interest rates. b. trade deficits or surpluses. c. inflation rates. d. income distribution

d. income distribution

All of the following are examples of efforts by firms to address the physical segment of the general a. development of sustainable packaging by McDonald's. b. reduction in carbon dioxide emissions by Procter & Gamble. c. reduction in water usage in plants by Unilever. d. increase in hiring of women and minorities at Microsoft

d. increase in hiring of women and minorities at Microsoft

Green restaurant design, sustainable packaging, waste management, and energy efficiency are aspects of the ___ segment of the general environment that McDonald's has sought to address (Chapter 2 Strategic Focus). a. technological b. political/legal c. global d. physical

d. physical

The Obama administration sought to pursue policies that would a. remove the United States from NAFTA. b. abolish antitrust laws. c. increase the amount of work U.S. companies outsource to firms in other nations. d. reduce the amount of work U.S. companies outsource to firms in other nations

d. reduce the amount of work U.S. companies outsource to firms in other nations

The use of the Internet by Netflix to collect data on customer preferences is an example of a. assessing. b. monitoring. c. forecasting. d. scanning.

d. scanning.

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. a. economic b. political/legal c. technological d. sociocultural

d. sociocultural

Counterfeiting goods and exporting them from China is a. ethical and legal. b. unethical but legal. c. ethical but illegal. d. unethical and illegal

d. unethical and illegal

The next critical technological opportunity for organizations is predicted to be a. the Internet. b. multiphasic interventions. c. biological engineering. d. wireless communications.

d. wireless communications.