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Exam 2: Analyzing the External Environment of the Firm: Creating Competitive Advantages

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Question 51

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In the general environment,many relationships exist among the various elements.General environmental trends can have positive and negative impacts on various industries.For example,the aging population might have a ______ impact on the health care industry and a ______ impact on the baby product industry.These are called _____________ impacts.

A) negative; positive; demographic
B) positive; negative; technological
C) negative; positive; sociocultural
D) positive; negative; demographic

E) A) and B)
F) A) and C)

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Question 52

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Environmental analysis requires continual questioning of all of these assumptions except

A) a priori ideas about the structure of the relevant industry.
B) biases about how to make money in the industry.
C) presuppositions about who is and is not a competitor.
D) continual updating of environmental knowledge.

E) A) and B)
F) A) and C)

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Question 53

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Elements of the five forces can be quantified.This is important for analyzing industry structure.Which of the following is not an example of an element that can be quantified?

If all strategic groups are moving in a similar direction,this could indicate a high degree of future volatility and intensity of competition.

Rivalry is most intense when there are high exit barriers and high industry growth.

Buyer power tends to be higher if suppliers provide undifferentiated or standard products.

The opportunities and threats of a SWOT analysis refer to the internal conditions of the firm.

Lowes has found that women prefer to do larger home-improvement projects with a man,whether a boyfriend,husband,or neighbor.As a result,in addition to its recipe card classes (that explain various projects that take only one weekend) ,Lowes offers co-ed store clinics for projects like sink installation.This is an example of which segment of the general environment?

Environmental scanning involves surveillance of the internal environment of a firm to predict environmental changes and detect changes already under way.

By inviting customers to write online reviews,Amazon used crowdsourcing to build value to its offer.

The Internet and digital technologies suppress the bargaining power of buyers by providing them with more information to make buying decisions.

SWOT analysis is a framework for analyzing the internal and external environment of a company.It consists of strengths,weaknesses,opportunities,and threats.According to a SWOT analysis,which of the following is not an aspect that the strategy of the firm must follow?

The power of a buyer group is increased if the buyer group has less concentration than the supplier group.

One CEO gets together with his critical people for half a day every eight weeks to discuss what's new and what's going on in the world.The setting is informal,and outsiders often attend.This is an example of how not to improve perceptual acuity.

In the SWOT framework,______________ are the same for all firms in the same competitive environment.

Incumbent firms may enjoy increased bargaining power because the Internet

The five-forces model helps to determine both the nature of competition in an industry and the profit potential for the industry. E. Porter describes the competitive environment in terms of five basic competitive forces that affect the ability of a firm to compete in a given market. Together, they determine the profit potential for a particular industry.

The threat of new entrants is high when there are

Only one scenario is considered in a scenario analysis in order to envision possible future outcomes.

By emphasizing the importance of identifying opportunities and threats,the SWOT framework makes firms act ________ rather than ___________.