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AllCards: 116
Environmentalscanningisthe TRUE
monitoring,evaluating,and
disseminatingofinformationfromthe
externalenvironmenttokeypeople
withinthecorporation.
Acorporationusesenvironmental TRUE
scanningtoavoidstrategicsurprise.
Politicallegalforcesregulatethevalues, FALSE
mores,andcustomsofsociety.
Thesocietalenvironmentincludesthe TRUE
economic,technological,politicallegal,
andsocioculturalforces.
Industryanalysiswaspopularizedby TRUE
MichaelPorter.
Home Notecards Books Classes SignIn
Indynamicenvironments,theCEO's FALSE
focusisonforcesinthesocietal
environment.
Today'sorganizationsmustscanthe TRUE
naturalenvironmentforfactorsthat
mightpreviouslyhavebeentakenfor
granted.
Thetransferringofprofitsfromaforeign TRUE
subsidiarytoacorporation's
headquartersisknownasrepatriationof
profits.
Anexampleofaneconomicvariablein TRUE
thesocietalenvironmentisinterest
rates.
Thegrowinghealthconsciousnessisan FALSE
exampleofapoliticallegalforce.
Oneofthedemographicvariablesinthe TRUE
societalenvironmentisthechanging
householdcomposition.
Oneofthebreakthroughdevelopments TRUE
intechnologyistheportableinformation
deviceandelectronicnetworking.
Amultinationalcorporationisa TRUE
companywithsignificantassetsand
activitiesinmultiplecountries.
Theoriginofcompetitiveadvantagelies TRUE
intheabilitytoidentifyandrespondto
environmentalchangewellinadvance
ofcompetition.
Strategicmyopiaisthewillingnessto TRUE
rejectunfamiliaraswellasnegative
information.
Booz&Companyfoundthatcompanies TRUE
thataremostsuccessfulatavoiding
surpriseshadawelldefinedsystemthat
integratedplanning,budgeting,and
businessreviews.
Anindustryisagroupoffirmsproducing TRUE
asimilarproductorservice.
AccordingtoMichaelPorter,theweaker FALSE
eachofthecompetitiveforces,themore
limitedcompaniesareintheirabilityto
raisepricesandearngreaterprofits.
AccordingtoMichaelPorter,ahigh TRUE
forcecanberegardedasathreat
becauseitislikelytoreduceprofits.
Anentrybarrierisanobstructionthat TRUE
makesitdifficultforacompanytoenter
anindustry.
Oneofthepossiblebarrierstoentryis TRUE
productdifferentiation.
Theneedtoinvesthugefinancial TRUE
resourcesinmanufacturingfacilitiesin
ordertoproducelargecommercial
airplanescreatesasignificantbarrierto
entrytoanycompetitorforBoeingand
Airbus.
Governmentscandolittletoerect FALSE
barrierstoentryinanindustry.
NutraSweetcanserveasaproduct TRUE
substituteforsugarsatisfyingthesame
need.
Abuyermaybepowerfulwhen FALSE
changingsupplierscostsagreatdeal.
Afragmentedindustryisdominatedbya FALSE
fewlargefirms,eachofwhichstruggles
todifferentiateitsproductsfromthe
competition.
Multidomesticindustriesarespecificto TRUE
eachcountryorgroupofcountries.
Theonlyfactorusedtodetermine FALSE
whetheranindustrywillbeprimarily
multidomesticorprimarilyglobalisthe
pressureforlocalresponsiveness.
McDonald'sandOliveGardenareinthe FALSE
samestrategicgroup.
AccordingtoMilesandSnow,reactors FALSE
arecompanieswithalimitedproduct
linethatfocusonimprovingthe
efficiencyoftheirexistingoperations.
Inhypercompetitiveindustries, TRUE
competitiveadvantagecomesfroman
uptodateknowledgeofenvironmental
trendsandcompetitiveactivitycoupled
withawillingnesstoriskacurrent
advantageforapossiblenew
advantage.
Keysuccessfactorsseldomvaryfrom FALSE
industrytoindustry.
Anindustrymatrixsummarizesthekey TRUE
successfactorswithinaparticular
industry.
Competitiveintelligenceisaformal TRUE
programofgatheringinformationona
company'scompetitors.
Businessintelligenceisoneofthe TRUE
fastestgrowingfieldswithinstrategic
management.
A.C.Nielsenisanexampleofan TRUE
outsideorganizationprovidingafirm
withcompetitiveintelligence.
TRUE
Tocombattheincreasingtheftof
companysecrets,theU.S.government
passedtheEconomicEspionageActin
1996.
Faultyunderlyingassumptionsarethe TRUE
mostfrequentcauseofforecasting
errors.
Extrapolationrestsontheassumption FALSE
thattheworldisrelativelydynamicand
changesquicklyintheshortrun.
Statisticalmodelingisaquantitative TRUE
forecastingtechniquethatattemptsto
discovercausaloratleastexplanatory
factorsthatlinktwoormoretimeseries
together.
Anindustryscenarioisaforecasted TRUE
descriptionofaparticularindustry's
likelyfuture.Itisdevelopedbyanalyzing
theprobableimpactoffuturesocietal
forcesonkeygroupsinaparticular
industry.
Thecombinationofthedegreeof Answer:C
complexityandthedegreeofchange
existinginanorganization'sexternal
environmentis/arecalled
A)strategicfactors.
B)strategicissues.
C)environmentaluncertainty.
D)strategicfit.
E)scenarios.
Accordingtothetext,onereason Answer:D
environmentaluncertaintyisathreatto
strategicmanagersisbecause
A)itisacostlyandtimeconsuming
process.
B)itcreatesanewplayingfieldinwhich
creativityandinnovationcanplaya
majorpartinstrategicdecisions.
C)itforcesthestrategicmanagertobe
morestable.
D)ithamperstheirabilitytodevelop
longrangeplans.
E)therearetoomanyuncontrollable
variables.
WhichofthefollowingisNOT Answer:C
descriptiveofexternalenvironmental
scanning?
A)usedasatooltoensurea
corporation'slongtermhealth
B)usedtomonitor,evaluate,and
disseminateinformationrelevanttothe
organizationaldevelopmentofstrategy
C)usedtoidentifymajorstockholders
D)usedasatoolforcorporationsto
avoidstrategicsurprise
E)usedtodetermineafirm's
competitiveadvantage
Thecorporation'staskenvironment Answer:B
A)encompassesthephysicalworking
areasoftheorganization.
B)includesthoseelementsorgroups
withinanorganization'sindustry.
C)isanadvisorycommitteetotop
management.
D)isanaccountingofthemanyjobs
withinanorganization.
E)isthejobrequirementspecification
listingnecessaryskillsandabilities.
WhichofthefollowingisNOTan Answer:D
elementoftheorganization'stask
environment?
A)localcommunities
B)tradeassociations
C)governments
D)technologicaldevelopments
E)specialinterestgroups
Whichenvironmentwasgenerally Answer:B
perceivedbybusinesspeopletobe
somethingtoexploit,notconserveuntil
thetwentiethcentury?
A)thetaskenvironment
B)thenaturalenvironment
C)theinternalenvironment
D)thesocietalenvironment
E)theexternalenvironment
WhichofthefollowingisNOTamajor Answer:B
forceinthesocietalenvironment?
A)politicallegalforces
B)laborforces
C)economicforces
D)technologicalforces
E)socioculturalforces
Allofthefollowingaretechnological Answer:A
breakthroughsalreadyhavinga
significantimpactonmanyindustries
EXCEPT
A)growinghealthconsciousness.
B)alternativeenergysources.
C)geneticallyalteredorganisms.
D)smart,mobilerobots.
E)virtualpersonalassistants.
Whichsocietalforceincludes Answer:E
demographictrends?
A)politicallegalforces
B)laborforces
C)economicforces
D)technologicalforces
E)socioculturalforces
WhichofthefollowingisNOToneofthe Answer:D
eightcurrentsocioculturaltrends
mentionedinthetext?
A)increasingenvironmentalawareness
B)growthoftheseniorsmarket
C)declineofthemassmarket
D)increasingfoodconsumption
E)impactofGenerationYboomlet
WhichisthelargestofthecurrentU.S. Answer:A
generations?
A)BabyBoomers
B)Woofies
C)SilentGeneration
D)GenX
E)GenY
Acompanywithsignificantassetsand Answer:A
activitiesinmultiplecountriesisknown
asa(n)
A)multinationalcorporation.
B)repatriatedcorporation.
C)transferablecorporation.
D)duplicatecorporation.
E)emancipatedcorporation.
Whenstrategicmanagershavea Answer:D
willingnesstorejectunfamiliaraswellas
negativeinformationitisreferredtoas
A)strategicparalysis.
B)corporateinertia.
C)managementindifference.
D)strategicmyopia.
E)corporateapathy.
Theoriginofcompetitiveadvantagelies Answer:B
intheabilityto
A)gainmajorstockholders.
B)identifyandrespondtoenvironmental
changewellinadvanceofcompetition.
C)launchproductsquickly.
D)servecustomersfaster.
E)createsurpriseforothers.
AccordingtoPorter,seeingclothing Answer:A
firmssuchasUnderArmourenterthe
athleticshoeindustrywouldreflecta
1.A)mediumbargainingpowerof
suppliers.
2.B)lowthreatofsubstitutes.
3.C)mediumbargainingpowerof
buyers.
4.D)highthreatofpotentialentrants.
5.E)lowcompetitiveintensity.
Industryanalysisisprimarilyconcerned Answer:B
withacorporation's
A)societalenvironment.
B)taskenvironment.
C)socioculturalenvironment.
D)economicenvironment.
E)internalenvironment.
AccordingtoPorter,thecorporationis Answer:A
mostconcernedwith
A)theintensityofcompetitionwithinits
industry.
B)theaggregatelevelofdemandfora
productline.
C)amarket'spositiononitslifecycle.
D)theamountofpressurefromthe
societalenvironment.
E)thelevelofgovernmentactioninan
industry.
InadditiontoPorter'sFiveForces, Answer:B
anotherforceaddedinthetextis
A)bargainingpowerofunions.
B)otherstakeholders.
C)threatofprospects.
D)threatofshareholders.
E)bargainingstrengthofemployees.
AccordingtoPorter,thecollective Answer:C
strengthoftheinteractionofpotential
entrants,buyers,substitutes,suppliers,
firmrivalry,andotherstakeholders
determine
A)thelevelofgovernmentactioninan
industry.
B)theprobableindustryattractiveness
andbusinessstrengthposition.
C)theultimateprofitpotentialinthe
industrymeasuredintermsoflongrun
returnoninvestedcapital.
D)theaggregatelevelofdemandfora
productline.
E)theamountofpressurefromthe
societalenvironment.
AccordingtoPorter'smodel,astrongor Answer:D
highforceislikelytoreduceprofitsand
canberegardedasa(n)
A)benefit.
B)opportunity.
C)advantage.
D)threat.
E)risk.
AccordingtoPorter'smodel,alowforce Answer:B
canenablethecompanytoearngreater
profitsandcanberegardedasa(n)
A)benefit.
B)opportunity.
C)advantage.
D)threat.
E)risk.
WhichofthefollowingisNOT Answer:D
descriptiveofthe"threatofnew
entrants"?
A)dependsonthepresenceofentry
barriers
B)haveadesiretogainmarketshare
C)dependsonthereactionofexisting
competitors
D)doesnotimpactindustry
attractiveness
E)bringsnewcapacityandsubstantial
resources
Whichbarriertoentrydocorporations Answer:D
suchasP&Gusetoforcenewentrants
tospendheavilytoovercomeexisting
customerloyalty?
A)rivalryamongexistingfirms
B)switchingcosts
C)capitalrequirements
D)productdifferentiation
E)accesstodistributionchannels
Whichbarriertoentryusescost Answer:E
advantagesassociatedwithlargesize?
A)rivalryamongexistingfirms
B)switchingcosts
C)costdisadvantagesindependentof
size Home Notecards Books Classes SignIn
D)capitalrequirements
E)economiesofscale
Whichbarriertoentryisdemonstrated Answer:C
byMicrosoft'sMSDOSoperating
system?
A)governmentpolicy
B)accesstodistributionchannels
C)costdisadvantagesindependentof
size
D)capitalrequirements
E)economiesofscale
Intelwasabletogainasignificantcost Answer:D
advantageoveritscompetitorsinthe
productionandsaleofmicroprocessors
becauseof
A)capitalrequirements.
B)productdifferentiation.
C)switchingcosts.
D)economiesofscale.
E)accesstodistribution.
WhichofthefollowingisNOT Answer:E
descriptiveofintenserivalryamong
firms?
A)slowindustrygrowth
B)highfixedcosts
C)highexitbarriers
D)fewcompetitorsorcompetitorsthat
areroughlyequalinsizeandpower
E)productofferingsthatarehighly
differentiated
WhichofthefollowingisNOT Answer:C
descriptiveofthethreatofsubstitute
productsorservices?

A)Substituteproductsappeartobe
different,butsatisfythesameneedas
anotherproduct.
B)Ifthecostofswitchingislow,
substitutesmayhaveastrongeffecton
anindustry.
C)Identifyingsubstitutesisrelatively
easysincetheylooksimilar.
D)Possiblesubstituteproductsor
servicesmaynotappeartobeeasily
substitutable.
E)Substituteslimitthepotentialreturns
ofanindustry.
Asugarcompanythatisworriedthat Answer:C
consumersmaybuyartificialsweetener
insteadofsugarisconcernedaboutthe
A)threatofnewentrants.
B)rivalryamongexistingfirms.
C)threatofsubstituteproducts.
D)bargainingpowerofsuppliers.
E)bargainingpowerofbuyers.
WhichofthefollowingisNOT Answer:E
descriptiveofahighlevelofbargaining
powersofbuyers?
A)Changingsupplierscostsverylittle.
B)Alternativesuppliersareplentiful
becauseofstandardizationofthe
product.
C)Thepurchasedproductrepresentsa
highpercentageofbuyer'scosts.
D)Thebuyerbuysalargeproportionof
theseller'sproductorservice.
E)Abuyerearnshighprofitsandisvery
insensitivetocostsandservice
differences.
WhenGeneralMotorsconsidersmaking Answer:B
itsownautomotiveparts,Delphi
AutomotiveSupplyCompanywouldbe
concernedwiththe
A)bargainingpowerofsuppliers.
B)bargainingpowerofbuyers.
C)rivalryamongexistingcompetitors.
D)threatofsubstitutes.
E)threatofnewentrants.
WhichofthefollowingisNOT Answer:A
descriptiveofahighlevelofbargaining
powerofsuppliers?
A)Substitutesarereadilyavailable.
B)Theproductorserviceisunique.
C)Thesupplierindustryisdominatedby
afewcompanies,butsellstoomany.
D)Thepurchasingindustrybuysonlya
smallportionofthesuppliergroup's
goodsandservices.
E)Suppliersareabletointegrate
forwardandcompetedirectlywiththeir
presentcustomers.
Othersoftwarecompaniescouldnot Answer:D
competewithMicrosoftbasedonthe
hesitationofconsumerstotryanew
software.WhichofPorter'sforcesdoes
thisreflect?
A)exitbarriers
B)bargainingpowerofbuyers
C)threatofsubstitutes
D)bargainingpowerofsuppliers
E)rivalryamongexistingfirms
Acompanyoranindustrywhose Answer:A
productworkswellwithafirm'sproduct
andwithoutwhichtheproductwould
losemuchofitsvalueisconsideredto
bea(n)
A)complementor.
B)oligopoly.
C)strategicgroup.
D)industryleader.
E)staggeredcompany.
Arelationshipthatillustratestheterm Answer:A
"complementor"is
A)MicrosoftandIntel.
B)GeneralMotorsandFord.
C)HewlettPackardandCompaq.
D)GatewayandDell.
E)AmericaOnlineandCompuServe.
Thestrengthofeachofthesixdriving Answer:B
forcesofindustrycompetitionvaries
accordingtothe
A)effectivenessofthestrategic
planning.
B)stageofindustryevolution.
C)capitalrequirements.
D)changesinthepoliticalenvironment.
E)amountofgovernmentregulation.
Inafragmentedindustry Answer:E
A)nofirmhaslargemarketshare.
B)pricesdropasnewcompetitorsenter
themarket.
C)economiesofscaleareusedto
reducecosts.
D)companiesintegratetofurtherreduce
costs.
E)alloftheabove
TheU.S.majorhomeapplianceindustry Answer:C
isanexampleofanindustry
A)thathasevolvedfromanoligopolyto
amonopoly.
B)inwhicheachcompanymaintaineda
distinctproductline.
C)thatwasoncefragmented,butnowis
consolidated.
D)thathasexperiencedconsistent,
increasingsales.
E)experiencingasuccessfulstrategyof
productspecializationbecauseof
productdifferentiation.
Anindustrydominatedbyafewlarge Answer:B
firms,allofwhichstrugglewithproduct
differentiation,isknownas
A)multidomestic.
B)consolidated.
C)global.
D)indigenous.
E)worldwide.
Inwhichtypeofinternationalindustrydo Answer:D
corporationstailortheirproductstothe
specificneedsofconsumersina
particularcountry?
A)consortiumindustry
B)globalindustry
C)indigenousindustry
D)multidomesticindustry
E)worldwideindustry
Whichtypeofinternationalindustry Answer:B
manufacturesandsellsthesame
productswithonlyminoradjustments
madeforindividualcountriesaroundthe
world?
A)consortiumindustry
B)globalindustry
C)indigenousindustry
D)multidomesticindustry
E)worldwideindustry
Whichofthefollowingisanexampleof Answer:C
aglobalindustry?
A)retailing
B)banking
C)tires
D)insurance
E)healthcare
Thetwofactorsthattendtodetermine Answer:A
whetheranindustrywillbeprimarily
multidomesticorprimarilyglobalare(1)
thepressureforcoordinationwithinthe
MNCsoperatinginthatindustryand(2)
A)thepressureforlocalresponsiveness
onthepartofindividualcountry
markets.
B)thepowerofthelocalcountry
governmentstorestrictMNCactions.
C)theneedforbrandmanagementin
thevariousMNCsoperatingwithinthat
industry.
D)theimportanceofdifferentiatingwith
integratingmechanismsinregional
cooperatives.
E)thelikelihoodofterroristactivity
impactingthatindustry.
Whenthepressureforcoordinationis Answer:A
strongandthepressureforlocal
responsivenessisweakformultinational
corporationswithinaparticularindustry,
theindustrywilltendtobecome
A)global.
B)consolidated.
C)multidomestic.
D)risky.
E)indigenous.
Whenthepressureforlocal Answer:C
responsivenessisstrongandthe
pressureforcoordinationisweakfor
multinationalcorporationsinanindustry,
theindustrywilltendtobecome
A)global.
B)consolidated.
C)multidomestic.
D)risky.
E)indigenous.
Whatisasetofbusinessunitsorfirms Answer:A
that"pursuesimilarstrategieswith
similarresources"?
A)strategicgroup
B)collectivecollaboration
C)cooperative
D)integralassociation
E)strategicassembly
WhichofthefollowingisNOToneofthe Answer:A
generalstrategictypesaccordingto
MilesandSnow?
A)initiators
B)reactors
C)analyzers
D)prospectors
E)defenders
AccordingtoMilesandSnow,which Answer:E
strategicorientationisdemonstratedby
companiesthathavealimitedproduct
lineandfocusesonimprovingthe
efficiencyoftheirexistingoperations?
A)initiators
B)reactors
C)analyzers
D)prospectors
E)defenders
AccordingtoMilesandSnow,a Answer:C
companythatoperatesinatleasttwo
differentproductmarketareasinwhich
oneproductisstableandtheotherone
isvariable,reflectswhichstrategic
orientation?
A)initiators
B)reactors
C)analyzers
D)prospectors
E)defenders
AccordingtoMilesandSnow, Answer:D
companieswithfairlybroadproduct
linesthatfocusonproductinnovations
andmarketopportunitiessuchasFrito
Lay,reflectwhichstrategicorientation?
A)initiators
B)reactors
C)analyzers
D)prospectors
E)defenders
AccordingtoMilesandSnow,most Answer:B
majorU.S.airlineshavereflectedwhich
strategicorientation?
A)initiators
B)reactors
C)analyzers
D)prospectors
E)defenders
Tosucceedinahypercompetitive Answer:D
industry,companiesmustbewillingto
A)cutpricesbelowmarginalcosts.
B)pursuemarketshareinsteadof
profits.
C)operateintheethicalgrayzone.
D)cannibalizetheirownsuccessful
productlines.
E)reducespendingonresearchand
development.
Atablewhichsummarizesthekey Answer:E
successfactorswithinaparticular
industryiscalleda(n)
A)EFASTable.
B)IFASTable.
C)SFASTable.
D)TOWSMatrix.
E)industrymatrix.
Thosevariablesthatcanaffect Answer:D
significantlytheoverallcompetitive
positionsofcompanieswithinany
particularindustryareknownas
A)externalstrategicfactors.
B)internalstrategicfactors.
C)matrixfactors.
D)keysuccessfactors.
E)industryscenario.
Aformalprogramofgathering Answer:B
informationonacompany'scompetitors
isreferredtoas
A)statisticalmodeling.
B)competitiveintelligence.
C)competitivestrategy.
D)quantitativeforecasting.
E)qualitativematrix.
Answer:E
Whichofthefollowingistrueinregards
tocompetitiveintelligence?
A)TheEconomicEspionageActmakes
itillegaltostealanymaterialthata
businesshastaken"reasonableefforts"
tokeepsecret.
B)TheSocietyofCompetitive
IntelligenceProfessionalsurges
strategiststostaywithinthelawandto
actethicallywhensearchingfor
information.
C)TheSocietyofCompetitive
IntelligenceProfessionalsstatesthat
illegalactivitiesarefoolishbecausethe
vastmajorityofworthwhilecompetitive
intelligenceisavailablepubliclyvia
annualreports,websites,andlibraries.
D)Anumberoffirmshireconsultants
withquestionablereputationswhodo
whatisnecessarytogetinformation
whentheselectedmethodsdonotmeet
SPICethicalstandardsorareillegal.
E)alloftheabove
Theprimaryactivityofacompetitive Answer:A
intelligenceunitisto
A)monitorcompetitors.
B)engageincorporateespionage.
C)surveystakeholders.
D)determineindustryR&Dstatistics.
E)reverseengineercompetitors'
products.
Astudyofnearly500oftheworld's Answer:E
largestcorporationsindicatedwhichof
thefollowingtobethemostwidely
practicedformofforecasting?
A)statisticalmodeling
B)scenariowriting
C)delphitechnique
D)brainstorming
E)trendextrapolation
Over________oflargecompaniesuse Answer:E
trendextrapolationforforecasting.
A)20%
B)30%
C)40%
D)50%
E)70%
Trendextrapolationis Answer:B
A)theprocessofconvertingintuition
andhunchesintoreality.
B)theextensionofpresenttrendsinto
thefuture.
C)theprocessofaskingsome
authoritiesintheareatomakean
"informedguess"aboutthefuture.
D)givenalargeamountofhistorical
dataoncertaininterrelatedfactors,one
attemptstoconceptualizealternative
futures.
E)detectingfaultyunderlying
assumptionsbeforeforecastingerrors
canoccur.
Anonquantitativeapproachto Answer:C
forecastingthatrequiressimplythe
presenceofpeoplewithsome
knowledgeofthesituationtobe
predictedtoproposeideaswithoutfirst
mentallyscreeningthemiscalled
A)simulations.
B)thedelphitechnique.
C)brainstorming.
D)signalmonitoring.
E)scenarios.
Onegroundrulenecessaryforeffective Answer:B
brainstormingis
A)scrutinizeeachideagenerated.
B)proposeideaswithoutmentally
screeningthem.
C)calculatingfutureearningsofeach
idea.
D)critiqueeachideaforrationality.
E)forecastthesuccessofeachidea.
Regressionanalysisisanexampleof Answer:B
whichquantitativeforecasting
technique?
A)thedelphitechnique
B)statisticalmodeling
C)brainstorming
D)trendimpactanalysis
E)morphologicalanalysis
Themostwidelyusedforecasting Answer:C
techniqueusedaftertrendextrapolation
is
A)statisticalmodeling.
B)simulations.
C)scenariowriting.
D)expertopinion.
E)brainstorming.
WhichoneofthefollowingisNOTpart Answer:C
oftheprocessofindustryscenarios?
A)Examinepossibleshiftsinsocietal
variables.
B)Identifyuncertaintiesineachofthe
sixforcesinthetaskenvironment.
C)Generateatleast15scenarios.
D)Makearangeofplausible
assumptionsaboutfuturetrends.
E)Analyzetheindustrysituationthat
wouldprevailundereachscenario.
Thetechniquerecommendedbythetext Answer:B
toorganizeananalysisofexternal
strategicfactorsiscalled
A)IFAS.
B)EFAS.
C)SFAS.
D)SWOT.
E)theissuesprioritymatrix.
IntheEFASTable,theindicatorofhow Answer:C
wellaparticularcompanyisresponding
tocurrentandexpectedfactorsinits
externalenvironmentischaracterizedby
the
A)IFASscore.
B)industrymatrix.
C)totalweightedscore.
D)SWOTscore.
E)SFASscore.
Describethefourgeneralforcesinthe Answer:Thefourgeneralforcesinthesocietal
societalenvironment. environmentareeconomic,technological,
politicallegal,andsociocultural.Economicforces
regulatetheexchangeofmaterials,money,energy,
andinformation.Technologicalforcesgenerate
problemsolvinginventions.Politicallegalforces
allocatepowerandprovideconstrainingand
protectinglawsandregulations.Socioculturalforces
regulatethevalues,mores,andcustomsofsociety.
Listeightcurrentsocioculturaltrendsin Answer:Eightcurrentsocioculturaltrendsinthe
theUnitedStatesthataretransforming UnitedStatesthataretransformingNorth
NorthAmericaandtheworld. Americaandtheworldareasfollows:
Increasingenvironmentalawareness
Growinghealthconsciousness
Expandingseniorsmarket
Home Notecards ImpactofMillennials
Books Classes SignIn
Declineofthemassmarket
Changingpaceandlocationoflife
Changinghouseholdcomposition
Increasingdiversityofworkforceandmarkets
DescribePorter'sapproachtoindustry Answer:MichaelPortercontendsthata
analysis. corporationismostconcernedwiththeintensity
ofcompetitionwithinitsindustry.Thelevelofthis
intensityisdeterminedbybasiccompetitiveforces.
Thesearethethreatofnewentrants,rivalryamong
existingfirms,threatofsubstituteproductsor
services,bargainingpowerofbuyers,bargaining
powerofsuppliers,andrelativepowerofother
stakeholders(addedlaterbytheauthors).
Newentrantstoanindustrytypicallybringtoitnew
capacity,adesiretogainmarketshare,and
substantialresources.Thethreatofentrydepends
onthepresenceofentrybarriersandthereaction
thatcanbeexpectedfromexistingcompetitors.
Acompetitivemovebyonefirmcanbeexpectedto
havenoticeableeffectonitscompetitorsandthus
maycauseretaliationorcounterefforts.Intense
rivalryisrelatedtothepresenceofthenumberof
competitors,rateofindustrygrowth,productor
servicecharacteristics,theamountoffixedcosts,
capacity,theheightofexitbarriers,andthediversity
ofrivals.
Substituteproductsarethoseproductsthatappear
tobedifferentbutcansatisfythesameneedas
anotherproduct.
Buyersaffectanindustrythroughtheirabilitytoforce
downprices,bargainforhigherqualityormore
services,andplaycompetitorsagainsteachother.
Supplierscanaffectanindustrythroughtheirability
toraisepricesorreducethequalityofpurchased
goodsandservices.
Thesixthforceincludesavarietyofstakeholder
groupsfromthetaskenvironment.Theimportance
ofthesestakeholdergroupsvariesbyindustry.
Distinguishbetweenafragmentedand Answer:Afragmentedindustryhasnofirmwitha
consolidatedindustry. largemarketshareandeachfirmservesonlya
smallpieceofthetotalmarketincompetitionwith
others.Asnewcompetitorsentertheindustry,prices
dropasaresultofcompetition.
Aconsolidatedindustryisdominatedbyafewlarge
firms,eachofwhichstrugglestodifferentiateits
productsfromthecompetition.Theautomobile,
petroleum,andmajorhomeapplianceindustriesare
examplesofmature,consolidatedindustrieseach
controlledbyafewlargecompetitors.
Whatarethetwofactorsthattendto Answer:Thefactorsthattendtodetermine
determinewhetheranindustrywillbe whetheranindustrywillbeprimarily
primarilymultidomesticorprimarily multidomesticorprimarilyglobalarepressurefor
global? coordinationwithinthemultinationaloperations
operatinginthatindustryandpressureforlocal
responsivenessonthepartofindividualcountry
markets.Amultidomesticindustryisoneinwhich
companiestailortheirproductstothespecificneeds
ofconsumersinaparticularcountry.Aglobal
industryisoneinwhichcompaniesmanufactureand
sellthesameproducts,withonlyminoradjustments
madeforindividualcountriesaroundtheworld.
Describethefourstrategictypesofthe Answer:AccordingtoMilesandSnow,thereare
MilesandSnowtypology. fourgeneraltypesoffirmsbasedontheirgeneral
strategicorientation.Defendersarecompanieswith
alimitedproductlinethatfocusonimprovingthe
efficiencyoftheirexistingoperations.Prospectors
arecompanieswithfairlybroadproductlinesthat
focusonproductinnovationandmarket
opportunities.Analyzersarecorporationsthat
operateinatleasttwodifferentproductmarket
areas,onestableandonevariable.Reactorsare
corporationsthatlackaconsistentstrategy
structureculturerelationship.
Definecompetitiveintelligence. Answer:Competitiveintelligenceisaformal
programofgatheringinformationonacompany's
competitors.Oftencalledbusinessintelligence,itis
oneofthefastestgrowingfieldswithinstrategic
management.Mostcompaniesuseoutside
organizations(suchasA.C.NielsenCo.)toprovide
themwithenvironmentaldata.TheInternetprovides
thequickestmeanstoobtaindata.Somecompanies
choosetouseindustrialespionageorother
intelligencegatheringtechniquestogettheir
informationstraightfromtheircompetitors.

Discussthemostcommonlypracticed Answer:Trendextrapolationisthemostwidely
formofforecasting. practicedformofforecastingwithover70%ofthe
world'slargestfirmsusingthistechniqueeither
occasionallyorfrequently.Extrapolationisthe
extensionofpresenttrendsintothefuture.Itrests
ontheassumptionthattheworldisreasonably
consistentandchangesslowlyintheshortrun.
Timeseriesmethodsareapproachesofthistype:
theyattempttocarryaseriesofhistoricalevents
forwardintothefuture.Thebasicproblemwith
extrapolationisthatahistoricaltrendisbasedona
seriesofpatternsorrelationshipsamongsomany
differentvariablesthatachangeinanyonecan
drasticallyalterthefuturedirectionofthetrend.Asa
ruleofthumb,thefurtherbackintothepastyoucan
findrelevantdatasupportingthetrend,themore
confidenceyoucanhaveintheprediction.

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