Deck 7: The External Audit

Question 1

In general,what happens to American goods in overseas markets when there is a strong dollar?

A)They are less expensive.
B)They are more attractive.
C)They are cheaper.
D)They are more expensive.
E)They are desirable.

Answer 1

D

Question 2

The world population is expected to grow to an estimated ________ billion in 2054.

A)6
B)7
C)8
D)9
E)10

Answer 2

D

Question 3

The process of performing an external audit needs to include

A)only top level managers,as it is a planning function.
B)as many managers and employees as possible.
C)primarily front-line supervisors.
D)between 15 to 20 managers for it to be valid.
E)stockholders and external government agencies.

Answer 3

B

Question 4

Hawaii,California,and ________ already have no majority race or ethnic group.

A)New York
B)New Jersey
C)New Hampshire
D)New Mexico
E)all of the above

Question 5

An external audit focuses on identifying and evaluating trends and events within the control of management.

Question 6

The Industrial Organization (I/O)approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.

A)less important than
B)equally important as
C)more important than
D)more common than
E)less common than

Question 7

The United States' population is

A)getting younger and less white.
B)getting younger and more white.
C)getting older and less white.
D)getting older and more white.
E)remaining stable as to age and racial make up.

Question 8

According to I/O theorists,which of the following contributes LEAST to firm's performance?

A)Economies of scale
B)Barriers to market entry
C)Product differentiation
D)Internal resources
E)Level of competitiveness

Question 9

To perform an external audit,a company first must

A)get an approval from the Securities and Exchange Commission.
B)perform an internal audit.
C)gather competitive intelligence and information about external trends.
D)hire a consultant to develop a comprehensive strategic plan.
E)all of the above

Question 10

Industry analysis is also referred to as external strategic management audit.

Question 11

The process of performing an external audit should involve

A)key representatives from each stakeholder group.
B)as many stakeholders as possible.
C)only strategists.
D)primarily strategists.
E)as many managers and employees as possible.

Question 12

External audits attempt to identify key variables that offer actionable responses.

Question 13

Discuss the process of performing an external audit.

Question 14

Collecting and evaluating information on competitors is essential for successful

A)internal analysis.
B)strategy evaluation.
C)strategy formulation.
D)strategy implementation.
E)strategy correction.

Question 15

External audits attempt to identify key variables that offer highly intuitive responses.

Question 16

The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business.

Question 17

External audits attempt to identify key variables that offer intuitive responses.

Question 18

External audits attempt to identify key variables that offer ________ responses.

A)actionable
B)authoritative
C)profitable
D)strategic
E)terminal

Question 19

As many managers and employees as possible should be involved in the process of performing an external audit.

Question 20

It is predicted that the United States will have no racial or ethnic majorities by the year

A)2035.
B)2045.
C)2055.
D)2065.
E)2075.

Question 21

Economic factors do not have much impact on the attractiveness of strategies.

Question 22

The historical trend of people moving from ________ has dramatically slowed.

A)the Northeast to the Sunbelt
B)the West to the Midwest
C)the Northeast to the Midwest
D)the Sunbelt to the West
E)the West to the Northeast

Question 23

Changes in which of the following can significantly affect firms?

A)Patent laws
B)Antitrust legislation
C)Tax rates
D)Lobbying activities
E)All of the above

Question 24

In recent times,which of the following has largely refrained from protectionist measures?

A)The European Union
B)The United States
C)India
D)Russia
E)India and Russia

Question 25

Competition in virtually all industries is

A)nonexistent.
B)intense.
C)never cutthroat.
D)easily avoidable.
E)insignificant.

Question 26

Who are the world's longest-living people?

A)Americans
B)Mexicans
C)Indians
D)Filipinos
E)Japanese

Question 27

The five major categories of variables known as external forces are: 1)economic forces,2)social,cultural,demographic,and natural environment forces,3)political,governmental,and legal forces,4)technological forces and 5)competitive forces.

Question 28

The United States is getting older and less white.

Question 29

It is predicted that,by 2050,over 20 percent of the population in the United States will be 65 years or older.

Question 30

All of the following are political,governmental,and legal variables that can represent key opportunities or threats to organizations EXCEPT

A)tariffs.
B)environmental regulations.
C)level of defense expenditures.
D)legislation on equal employment.
E)population changes by race,age,sex,and level of affluence.

Question 31

A low value of the dollar means lower exports and higher imports.

Question 32

A weak dollar means

A)lower exports and higher imports.
B)lower exports and lower imports.
C)lower exports and no effect on imports.
D)higher exports and higher imports.
E)higher exports and lower imports.

Question 33

The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage.

Question 34

Which state has the highest union membership rate?

A)Arkansas
B)Colorado
C)New Hampshire
D)New York
E)North Carolina

Question 35

Which of the following is NOT a characteristic that describes the most competitive companies in America?

A)Divestiture is essential to growth.
B)Hire and retain the best employees and managers possible.
C)Continually adapt,innovate,improve-especially when the firm is successful.
D)Strive to stay cost-competitive on a global basis.
E)Whether it's broke or not,fix it.

Question 36

To perform an external audit,a company first must gather competitive intelligence and information about economic,social,cultural,demographic,environmental,political,governmental,legal,and technological trends.

Question 37

When an industry relies heavily on government contracts,which forecasts can be the most important part of an external audit?

A)Economic
B)Political
C)Technological
D)Competitive
E)Multinational

Question 38

There are benefits to the U.S.economy resulting from a low value of the U.S.Dollar.

Question 39

Many economists say the current rash of trade constraints will make it ________ for global economic growth.

A)easier
B)impossible
C)harder
D)more likely
E)less time-consuming

Question 40

In recent times,________ perhaps has instituted the most protectionist measures by raising tariffs on most imports and subsidizing its own exports.

A)Russia
B)The United States
C)The European Union
D)India
E)Switzerland

Question 41

Wisconsin recently passed a law strengthening collective-bargaining rights for the state's public-employee unions.

Question 42

Wisconsin recently passed a law eliminating most collective-bargaining rights for the state's public-employee unions.

Question 43

Walgreens and CVS pharmacies are located generally across the street from each other and battle each other every day on price and customer service.

Question 44

U.S.households are making more and more purchases online.

Question 45

The United States has been more active than other nations in protectionist measures and has engaged in many "Buy American" policies.

Question 46

The historical trend of people moving from the Northeast and Midwest to the Sunbelt and West has dramatically increased.

Question 47

There are now more American households consisting of married couples with children than of people living alone or with unrelated people.

Question 48

Remaining solely domestic is an increasingly safe strategy for U.S.companies.

Question 49

India is increasing tariffs on foreign steel.

Question 50

Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts.

Question 51

The trend toward an older America is bad news for furniture producers,hotels,airlines and home builders.

Question 52

What are the five major types of external forces that should be examined as part of an external audit? Give an example of each type of force.

Question 53

A characteristic that describes the most competitive companies is adopting the adage,"Whether it's broke or not,fix it";in other words,continually strive to improve everything about the firm.

Question 54

Erosion of the U.S.manufacturing base is reflected in the sharp increase in labor union membership in the last decade.

Question 55

It is predicted that,by 2050,over 25 percent of the population in the United States will be 65 years or older.

Question 56

By 2050,the Census Bureau projects that the number of Americans age 100 and older will dramatically decrease.

Question 57

By 2075,the United States will have no racial or ethnic majority.

Question 58

The increase in high tech manufacturing base in the United States is reflected in the sharp increase in labor union membership in the last decade.

Question 59

Protectionism is used by various countries around the world to safeguard their domestic industries.

Question 60

Political issues and stances impact strategic decisions.

Question 61

The investor relations pages of a company website ________ information about a firm.

A)is a good place to start to find
B)is not a reliable source of
C)is only acceptable as a last resort for
D)should not be used as the first place to look for
E)is a waste of time when searching for

Question 62

Discuss the Industrial Organization (I/O)approach in relation to competitive advantage.

Question 63

Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses.

Question 64

When the products being purchased are standard or undifferentiated,it results in ________ bargaining power of consumers.

A)marginalized
B)lower
C)higher
D)negative
E)negligible

Question 65

According to Porter,what is usually the most powerful of the five competitive forces?

A)Potential development of substitute products
B)Bargaining power of suppliers
C)Bargaining power of consumers
D)Rivalry among competing firms
E)Potential entry of new competitors

Question 66

A systematic and ethical process for gathering and analyzing information about the competition's activities and general trends to further a business' own goals is called

A)unethical business practices.
B)artificial intelligence.
C)competitive intelligence.
D)industrial espionage.
E)competitive advantage.

Question 67

Significant barriers to entry are not always sufficient to keep some new firms from entering industries with higher-quality products,lower prices,and substantial marketing resources.

Question 68

What is NOT one of Michael Porter's five competitive forces?

A)Potential entry of new competitors
B)Rivalry among competing firms
C)Bargaining power of unions
D)Bargaining power of suppliers
E)Bargaining power of consumers

Question 69

A forward integration strategy is used by firms to gain control or ownership of suppliers.

Question 70

Explain how new technologies have been impacting strategic-planning decisions.

Question 71

Whenever new firms can easily enter a particular industry,the intensity of competitiveness among firms tends to

A)stay the same.
B)increase.
C)decrease.
D)neutralize.
E)become irrelevant.

Question 72

Unpublished sources of external strategic information include all of the following EXCEPT

A)abstracts.
B)customer surveys.
C)market research.
D)speeches at professional and shareholders' meetings.
E)conversations with stakeholders.

Question 73

According to Michael Porter,five competitive forces define the nature of competitiveness in a given industry: 1)rivalry among competing firms,2)potential entry of new competitors,3)potential development of substitute products,4)bargaining power of suppliers,and 5)bargaining power of consumers.

Question 74

________ is NOT a basic mission of a competitive intelligence program.

A)Providing a general understanding of an industry
B)Providing a general understanding of a company's competitors
C)Identifying industry executives who could be hired by the firm
D)Identifying areas in which competitors are vulnerable and assessing the impact strategic actions would have on competitors
E)Identifying potential moves a competitor might make that would endanger a firm's position in the market

Question 75

If suppliers are unreliable or too costly,which of these strategies may be appropriate?

A)Horizontal integration
B)Backward integration
C)Market penetration
D)Forward integration
E)Concentric diversification

Question 76

Intensity of competition ________ in lower-return industries.

A)is lowest
B)is nonexistent
C)is highest
D)is not important
E)fluctuates

Question 77

According to Michael Porter,the nature of competitiveness in a given industry can be viewed as a composite of five forces.Name these forces.

Question 78

A ________ integration strategy is used by firms to gain control or ownership of suppliers.

A)backward
B)forward
C)horizontal
D)vertical
E)vortexed

Question 79

Bargaining power of consumers is usually the most powerful of Porter's five competitive forces.

Question 80

According to Michael Porter,what are the forces that together define the nature of competitiveness in a given industry.Discuss the one force that is usually the most powerful.