Unit 3

Bottle Rocket believes that to get its employees to live the values, it's best to __________.

put the values into action

internal factors

includes factors that are within the company over which management has control. include company policies, employees, corporate culture and values, leadership, product quality, and financial policies. The internal environment can be changed and adjusted in order to improve the organization.

global factors

involve what is going on around the world. Companies that operate in foreign markets cannot focus solely on domestic economic conditions. They must monitor situations in every region where they do business.

Park Place calls their employees "members" and their customers "clients." This is part of the Park Place _____.

culture

Competitive Factors

deal with what others are doing in similar or competing industries. It is always important to know what the competition is doing and keep up with or ahead of the competition

Which of the following does NOT describe the culture at Texas Instruments?

formal

Workers at the Richards Group are arranged, not by function or department, but instead are mixed up with an account manager seated next to a creative, brand manager. At the Richards Group, they believe this contributes to its corporate culture and __________.

the way people perform

direct competition

there are always other companies offering something similar

social factors

variables related to social relations and general social includes social movement Environmental movements changes in fashion consumer preferences

economic factors

variables that affect the entire economy interest rates unemployment rates consumer confidence recessions depressions

Which of the following is a true statement about the business environment?

A business environment is all the external and internal factors that influence a business

Which of the following is NOT one of the ways that managers can help to create a positive corporate culture?

Complaining about upper management

Which of the following does NOT describe the culture at Texas Instruments?

Formal

technological

Innovation that can increase productivity such as computer software and automated production new technologies can help a business grow but they can also cause existing products and processes to become obsolete

Which factors within the company are under management's control?

Internal

Why do managers analyze the internal business environment of the company?

It helps managers identify the company's strengths and weaknesses

Which of the following is true about the internal business environment for a company?

It is within the control of the company

Which following statement represents good advice to a business owner?

Keep abreast of technological advances and adapt strategies in order to take advantage of opportunities and ward off threats A business owner must keep abreast of technological advances and adapt their strategies, both to take advantage of the opportunities and to ward off threats.

McDonald's has stopped "super-sizing" and they offer apples instead of French fries in Kid's Meals as a healthier option. McDonald's has done these things in response to changes in which business environment?

Legal

Frank is always looking for new prospects and places that could use his catering services. Frank is focusing on which external portion of the SWOT analysis?

Opportunities

Which of the following represent the external situations that bring a competitive advantage if seized upon?

Opportunities

Dan owns the State Farm Insurance office in his town. He wants to figure out what people in his market see as his company's strengths and also what it could improve upon. He also believes it is important to examine the changes in government policy related to the insurance industry as well as know what his competitors are doing. What would you recommend that Dan do? Conduct a SWOT analysis Hire a business strategist Open a franchise Conduct a plus/delta

A conduct

Factors in the internal business environment include all of the following EXCEPT what?

Customers

Technology is part of which business environment?

External

Which factor is NOT a part of the internal business environment?

Social

Walmart pays close attention to what Amazon does just as Apple pays attention to what is going on at Google. Why is this the case? They want to copy everything their competitors are doing in order to be as similar as possible to the competition They do not want to be caught off guard and lose an advantage if a competitor comes out with something new that customers want The want to steal secret methods of doing business in order to be the first to the market with new products and services They want to take advantage of the internal business environment by matching prices

They do not want to be caught off guard and lose an advantage if a competitor comes out with something new that customers want

As the owner of an accounting firm, Gene needs to pay attention to the economic factors of the business environment. What factors should Gene monitor?

Business cycles, inflation, unemployment, interest rates, and income

Costly changes in technology may change the way Marlon has to conduct his delivery business. Which SWOT element does Marlon need to consider here?

Threats

Which of the following include factors beyond the control of the company that may cause damage and need to be avoided or defended against?

Threats

What is the purpose of assessing the external environment in a SWOT analysis?

To identify opportunities and threats of a company

What is the purpose of assessing the internal environment in a SWOT analysis?

To identify strengths and weaknesses of a company

The sales of heavy equipment manufacturers like Caterpillar are strongly affected by the economic environment. What elements of the economic environment should a heavy equipment manufacturer pay close attention to? they heavy equipment manufactures need to constantly monitor these external environments (economic, social, technological, competitive, political/legal, and global) in order to meet challenges and seize opportunities.

Acceptable answer: Economic conditions such as interest rates, income levels, GDP, housing starts, and overall growth in the economy will impact a heavy equipment company. When the economy is in a growth mode, sales of heavy equipment will increase as more construction takes place. As the economy slows, sales of heavy equipment will decrease.

Jeremy is a department manager at the company where you currently work. As a manager, what contributions could Jeremy make to the corporate culture? Discuss specific examples. Jeremy could make corporate culture contributions at city auto insurance by demonstrating great leadership, coming in to work with a positive attitude and being ensuring that it is possible for us to reach our daily goals for premium total and agency fees. He should show by example great customer service, greeting ever customer walking in and thanking them for their business as they are walking out. He should make sure that every new employee is being trained to be self motivated and reach personal goal. But also have weekly morning meeting to set goals and discuss strategies to reach our given goal.

Acceptable answer: Jeremy can create a positive culture by paying attention to the people he hires and by modeling a positive attitude at work. New employees tend to emulate the people around them. If others are complaining about the job, leaving at 4 PM, and not cooperating with coworkers, then that is what the new employee will understand the company culture to be. However, if Jeremy is upbeat, models a good work ethic, and enjoys his time at work, that positive attitude will rub off on everyone else and become a part of the corporate culture.

What is the biggest issue between business and government regulations in the forest and paper industries?

Balancing the needs of preservation and the needs of people

Which of the following represents changes in the technological business environment?

Changes in manufacturing equipment, communication with customers, and distribution of products

In a capitalist economy, business owners must figure out what makes their business successful and different from other similar businesses. This means they must understand which business environment?

Competitive

Martin owns a leather boot design and manufacturing firm. He travels around the world attempting to see new trends and technologies other boot manufacturing companies are implementing. Martin is paying attention to which external business environment?

Competitive Martin seeks product ideas from outside the organization by paying attention to what the competition is doing. He is looking at the competitive business environment.

Dan owns the State Farm Insurance office in his town. He wants to figure out what people in his market see as his company's strengths and also what it could improve upon. He also believes it is important to examine the changes in government policy related to the insurance industry as well as know what his competitors are doing. What would you recommend that Dan do?

Conduct a SWOT analysis

What are opportunities in a SWOT analysis?

External favorable situations which can bring a competitive advantage

What are threats in a SWOT analysis?

External unfavorable situations which can negatively affect the business

If legislation were passed to increase the minimum wage on a national level, it could pose a risk to businesses because labor costs would increase and profitability would decrease. Which business environment is being discussed here?

Makers of competing brands and substitute products Business owners and managers need to monitor the activities of two groups of competitors: the makers of competing brands and the makers of substitute products.

Which of the following is an external environment analysis framework that helps guide prospecting and directs you to collect information about, and analyze, each environmental dimension to identify the broad range of threats and opportunities facing the organization?

PESTEL analysis

Virginia owns a successful computer software company. She attributes her success to continually scanning for things that could create challenges, risks, opportunities, and changes for her company. What is Virginia doing?

Paying attention to environmental forces

Passage of the Affordable Healthcare Act has recently turned the insurance industry upside-down. This is an example of which business environment for insurance businesses?

Political/Legal

Which environment involves changes with regard to legislation, regulations, and court decisions that have the potential to affect a business in some way?

Political/Legal environment

Laws, regulations, trade barriers, war, and social unrest are all examples of which type of external business environmental factors?

Political/legal

Which tool would you recommend to help understand the internal and external environment of a company?

SWOT analysis

The company you work for or have previously worked for is considering an expansion of some type. Discuss the strengths, weaknesses, opportunities and threats of a potential expansion. Considering expanding city auto insurance Strengths- opening up a new location perhaps in a different city will help us gain new customers as well as have more easy access to market close to business. we may also offer better competitive rates to other nearby agencies weaknesses- we may become short on staff meaning there is a possibility that their will only be one employee per location meaning we might have less time to market. Opportunities- expanding out company could make our name more known and we will have many future opportunities for success Treats- we will risk a chance of other insurances more popularly known in the business having better technology or better rates making it difficult for our company to adapt

Responses will vary, however a SWOT analysis should be included related to the potential expansion.

Georgia owns a salon and spa. In this very competitive environment, she needs a useful technique for understanding her company's strengths and weaknesses, and for identifying both the opportunities open to her and the threats she faces. What technique would you recommend to Georgia?

SWOT analysis

Farrah is an upbeat manager who models a good work ethic and enjoys his or her time at work. What is Farrah doing for the company?

She is helping to create a positive corporate culture

The internal business environment includes all of the following EXCEPT what?

Social trends

Think about the clothes you wore five years ago: Would you wear them today? A lot of people wouldn't—they're the wrong style, the wrong fit, the wrong material, the wrong color, or just plain wrong. As the owner of a trendy clothing boutique, you wouldn't survive if you tried to sell the same styles every year. You are paying careful attention to what business environment?

Social/Cultural

John's auto repair company is unique in that it is open until 10:00 P.M. offering working people a chance to get their cars fixed after normal business hours. This unique quality falls under what category in a SWOT analysis?

Strengths This uniqueness is a strength. John is open for customers when his competitors are not. This strength gives John a competitive advantage.

A good starting point for strategizing is an assessment of what an organization does well and what it does not do well. Which two elements of the SWOT analysis can provide this information?

Strengths and weaknesses

SWOT

Strengths: internal factors that provide an edge to the company over its competitors. Weaknesses: internal factors that can be harmful if used against the firm by its competitors. Opportunities: external favorable situations which can bring a competitive advantage. Threats: external unfavorable situations which can negatively affect the business.

Which things are involved in the creation of a corporate culture?

Symbols, stories, heroes, slogans, and ceremonies

David wants to examine the strengths and weaknesses of his plumbing company. What should David be looking at?

The internal business environment

The recent societal trend toward consumers trying to live healthier lifestyles is important to Barbara who owns a health food store. Why is this true? Economic trends influence sales Demographic and geographic changes drive consumer trends The social trend toward healthier lifestyles could impact her business There are significant legal issues involved with healthcare costs and insurance

The social trend toward healthier lifestyles could impact her business

Walmart pays close attention to what Amazon does just as Apple pays attention to what is going on at Google. Why is this the case?

They do not want to be caught off guard and lose an advantage if a competitor comes out with something new that customers want

You manufacture your electrical parts in China and sell them all over the world. Which of the following statements about your need to understand the economic environment is NOT accurate?

When the economy is slowing (or stalled) and unemployment is rising, it pushes interest rates upward This statement is NOT accurate: When the economy is slowing (or stalled) and unemployment is rising, it pushes interest rates upward. Instead, interest rates drop lower under these conditions.

External environmental factors

be more dangerous for an organization given the fact they are unpredictable, hard to prepare for, and often bewildering.

Economic conditions include

business cycles, inflation, and level of income and its growth rate.

External environmental factors generally fall into one or more of six major categories

economic, social, technological, competitive, political/legal, and global.

political or legal factors

government activities and political conditions that may affect your business laws regulations trade barriers wars social unrest

indirect competition

or there are other ways to satisfy the same customer's need

PESTEL Analysis

political, economic, sociocultural, technological, environmental, and legal environments.