Question 1

Boards of directors use outsiders to critique their strategy. This is necessary mostly to improve

Accepted Answer

A)   financial returns.
B)   organizational hierarchy.
C)   perceptual acuity.
D)   employee relations.E) A) and B)
F) A) and C)

Question 2

Which of the following is notan example of corporate competitive intelligence?

Accepted Answer

A)   banks tracking home loans
B)   airlines changing hundreds of fares daily in response to competitor tactics
C)   consumers comparing product offers online
D)   car manufacturers offering sales incentives based on rival offersE) A) and B)
F) B) and C)

Question 3

In some industries, low switching costs can act as an important barrier to entry.

Accepted Answer

A) True 
 B)False

Question 4

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?

Accepted Answer

A)   the percentage of the buyer total cost accounted for by the industry product
B)   the percentage of industry sales required to fill a plant or operate a logistical network to efficient scale
C)   the buyer switching cost
D)   the governmental regulatory policyE) A) and D)
F) A) and C)

Question 5

Corporate retreats do not

Accepted Answer

A)   permit companies to discuss larger marketplace trends.
B)   guarantee positive consumer response to new products.
C)   give companies an opportunity to look beyond their own industries.
D)   oblige management to automatically change strategy.E) A) and D)
F) A) and B)

Question 6

Which one of the following statements is an example of how to improve perceptual acuity?

Accepted Answer

A)   A CEO meets with other CEOs of non-competing companies to examine the world from multiple perspectives and then shares the results with his own management team.
B)   A CEO meets with the company management team regularly to analyze current world events and their potential impact on the company.
C)   A CEO meets with direct competitors to analyze current industry trends. The CEOs share their conclusions with their respective companies.
D)   Outsiders are brought in to the board meeting to critique the company strategy, which considers the new information in its potential revamping of the strategy.E) All of the above
F) A) and C)

Question 7

In the general environment, which of the following is not a demographic trend?

Accepted Answer

A)   aging population
B)   greater disparities in income levels
C)   changes in ethnic composition
D)   more women in the workforceE) A) and B)
F) All of the above

Question 8

Strategic groups consist of firms that are more ________ to each other than firms that are not.

Accepted Answer

A)   familiar
B)   similar
C)   friendly
D)   usefulE) B) and C)
F) All of the above

Question 9

Although changes in the general environment may often adversely or favorably impact a firm, they seldom alter an entire industry.

Accepted Answer

A) True 
 B)False

Question 10

Referring to the textbook Exhibit 2.7 The World Automobile Industry: Strategic Groups, which strategic group consists of firms high in product pricing/quality and average in their product#NAME?

Accepted Answer

A)   Ferrari, Lamborghini, Porsche
B)   Toyota, Ford, General Motors, Chrysler, Honda, Nissan
C)   Chery, Geely, Tata Motors
D)   Mercedes, BMW, AudiE) A) and B)
F) None of the above

Question 11

The strategic groups concept is valuable for charting the ________ directions of firm strategies.

Accepted Answer

A)   historical
B)   past
C)   present
D)   futureE) B) and D)
F) A) and C)

Question 12

Strategic groups consist of a group of

Accepted Answer

A)   top executives that makes strategies for a company.
B)   executives drawn from different companies within an industry that makes decisions on industry standards.
C)   firms within an industry that decides to collude rather than compete with each other so that they can increase their profits.
D)   firms within an industry that follows similar strategies.E) B) and C)
F) None of the above

Question 13

Incumbent firms may enjoy increased bargaining power because the Internet

Accepted Answer

A)   focuses marketing efforts on end users.
B)   has reduced the number of wholesalers and distributors.
C)   increases channel conflict.
D)   diminishes the power of many distribution channel intermediaries.E) B) and C)
F) A) and D)

Question 14

Perceptual acuity, according to Ram Charan, is the ability to know for certain what will happen in the future.

Accepted Answer

A) True 
 B)False

Question 15

Classifying an industry into strategic groups involves judgment. If it is useful as an analytical tool, we must exercise caution in deciding what dimensions to use to map these firms.Dimensions include all of the following except

Accepted Answer

A)   breadth of product and geographic scope.
B)   price and quality.
C)   degree of vertical integration.
D)   management team.E) A) and B)
F) A) and C)

Question 16

Why must successful managers recognize opportunities and threats in their company external environment?

Accepted Answer

A)   If they miscalculate the market, opportunities will be lost.
B)   If they misread the market, they are likely to become rich.
C)   If they identify all of the environmental threats, they are guaranteed to acquire large market share.
D)   If they identify all of the environmental opportunities, they are guaranteed to acquire large market share.E) A) and B)
F) All of the above

Question 17

Scanning the general environment would identify information on

Accepted Answer

A)   substitute goods.
B)   customer and firm bargaining power.
C)   the aging population and ethnic shifts.
D)   competitive rivalry.E) A) and D)
F) B) and D)

Question 18

Executives must be careful to avoid spending so much time and effort tracking the actions of ________ that they ignore ________.

Accepted Answer

A)   competitors; customers
B)   customers; competitors
C)   traditional competitors; new competitors
D)   existing customers; existing competitorsE) A) and D)
F) None of the above

Question 19

Steve Jobs, former chairman of Apple, demonstrated that ________ also are important in forecasting.

Accepted Answer

A)   character and ability
B)   intuition and judgment
C)   training and experience
D)   imagination and trainingE) B) and C)
F) A) and D)

Question 20

An automobile manufacturer acquires a rental car company. This is an example of

Accepted Answer

A)   backward integration.
B)   forward integration.
C)   economies of scale.
D)   product differentiation.E) A) and B)
F) All of the above

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

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?

Correct AnswerverifiedShow Answer

Boards of directors use outsiders to critique their strategy. This is necessary mostly to improve

Correct AnswerverifiedShow Answer

Corporate retreats do not

Correct AnswerverifiedShow Answer

Executives must be careful to avoid spending so much time and effort tracking the actions of ________ that they ignore ________.

Correct AnswerverifiedShow Answer

Which one of the following statements is an example of how to improve perceptual acuity?

Correct AnswerverifiedShow Answer

Strategic groups consist of a group of

Correct AnswerverifiedShow Answer

Classifying an industry into strategic groups involves judgment. If it is useful as an analytical tool, we must exercise caution in deciding what dimensions to use to map these firms.Dimensions include all of the following except

Correct AnswerverifiedShow Answer

Referring to the textbook Exhibit 2.7 The World Automobile Industry: Strategic Groups, which strategic group consists of firms high in product pricing/quality and average in their product#NAME?

Correct AnswerverifiedShow Answer

Although changes in the general environment may often adversely or favorably impact a firm, they seldom alter an entire industry.

Correct AnswerverifiedShow Answer

The strategic groups concept is valuable for charting the ________ directions of firm strategies.

Correct AnswerverifiedShow Answer

Perceptual acuity, according to Ram Charan, is the ability to know for certain what will happen in the future.

Correct AnswerverifiedShow Answer

In the general environment, which of the following is not a demographic trend?

Correct AnswerverifiedShow Answer

Why must successful managers recognize opportunities and threats in their company external environment?

Correct AnswerverifiedShow Answer

Strategic groups consist of firms that are more ________ to each other than firms that are not.

Correct AnswerverifiedShow Answer

In some industries, low switching costs can act as an important barrier to entry.

Correct AnswerverifiedShow Answer

An automobile manufacturer acquires a rental car company. This is an example of

Correct AnswerverifiedShow Answer

Incumbent firms may enjoy increased bargaining power because the Internet

Correct AnswerverifiedShow Answer

Steve Jobs, former chairman of Apple, demonstrated that ________ also are important in forecasting.

Correct AnswerverifiedShow Answer

Which of the following is notan example of corporate competitive intelligence?

Correct AnswerverifiedShow Answer

Scanning the general environment would identify information on

Correct AnswerverifiedShow Answer

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Executives must be careful to avoid spending so much time and effort tracking the actions of that they ignore .

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