Deck 3: The External Assessment

Question 1

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.

Answer 1

C

Question 2

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

Answer 2

False

Question 3

In performing strategic planning and case analysis, relevant SCDE factors for a particular firm must be ________ and actionable to be useful.

A) important
B) past focused
C) present focused
D) quantified
E) secular

Answer 3

D

Question 4

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.

Question 5

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

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

Question 6

In the U.S. food industry, demand for processed packaged foods is ________.

A) increasing
B) stabilizing
C) accelerating
D) declining
E) plateauing

Question 7

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

Question 8

External audit is sometimes called

A) strategic analysis.
B) strategy evaluation.
C) statutory audit.
D) financial audit.
E) industry analysis.

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) create a budget.

Question 10

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 11

Which of the following is NOT an external force that must be examined in formulating strategies?

A) Economic
B) Social
C) Organizational
D) Cultural
E) Environmental

Question 12

The acronym SCDE stands for social, cultural, demographic, and ________ forces.

A) economic
B) ecological
C) ethnic
D) external
E) environment

Question 13

Which of the following states has zero state income tax?

A) Florida
B) New York
C) North Carolina
D) Montana
E) Delaware

Question 14

Individuals age 65 and older in the United States as a percentage of the population will rise to ________ percent by 2030.

A) 27
B) 31
C) 14
D) 22
E) 19

Question 15

Availability of credit falls under the ________ forces category of external forces.

A) technological
B) social
C) environmental
D) organizational
E) economic

Question 16

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

Question 17

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 18

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

Question 19

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

Question 20

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

Question 21

Hiring top executives from rival firms is a way companies obtain competitive intelligence.

Question 22

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 23

Major competitors' strengths may represent key threats.

Question 24

Competition in virtually all industries is

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

Question 25

The World Economic Outlook report predicts a global growth rate of around ________ percent.

A) 3.6
B) 7.8
C) 2.1
D) 1.8
E) 5.3

Question 26

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 27

________ forces are shaping the way people live, work, produce, and consume.

A) SCDE
B) VUCA
C) IO
D) Porter's five-
E) Internal

Question 28

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 29

Major competitors' strengths are areas of concern, but do not represent key threats to a firm.

Question 30

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 31

An effective competitive intelligence program allows all areas of a firm to access consistent and verifiable information in making decisions.

Question 32

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 33

In 2012, ________ passed the world's first legislation that would treat marijuana like alcohol, taxing and regulating its sales.

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

Question 34

Major competitors' weaknesses can represent internal opportunities.

Question 35

The shift to a service economy is an example of a(n) ________ force.

A) technological
B) social, cultural, demographic, and environment (SCDE)
C) economic
D) legal
E) political

Question 36

The emergence of 3D printing is an example of a(n) ________ force that impacts organizations.

A) economic
B) legal
C) political
D) social, cultural, demographic, and environment (SCDE)
E) technological

Question 37

A strong dollar enables ________ firms to purchase raw materials more cheaply from other countries.

A) European Union
B) United States
C) Indian
D) Russian
E) Chinese

Question 38

Corporate intelligence is the name for a systematic and ethical process for gathering and analyzing information about the competition's activities and general business trends to further a business's own goals.

Question 39

Competitive intelligence is a polite way of referring to corporate espionage.

Question 40

Intelligence gathering is an unethical business practice.

Question 41

The United States is getting older.

Question 42

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

Question 43

In performing strategic planning and case analysis, relevant SCDE factors for a particular firm need not be quantified to be useful.

Question 44

The trend toward an older society is good news for restaurants.

Question 45

In the U.S. food industry, demand for processed packaged foods is increasing.

Question 46

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

Question 47

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

Question 48

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

Question 49

For firms with large U.S. sales, a strong dollar provides a boost.

Question 50

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

Question 51

Political issues and stances impact strategic decisions.

Question 52

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

Question 53

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

Question 54

Florida was the first state to legalize marijuana.

Question 55

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

Question 56

Consumers in the United States now desire sedans rather than automobiles with greater space and utility.

Question 57

It is predicted that, by 2030, 19 percent of the population in the United States will be 65 years or older.

Question 58

By 2030, the Census Bureau projects that the number of Americans age 65 and older will dramatically decrease.

Question 59

Competitive intelligence is not corporate espionage.

Question 60

Florida is one of nine states that has zero state income tax.

Question 61

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 62

Wisconsin was the first state to legalize marijuana.

Question 63

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

Question 64

Explain briefly the SCDE forces.

Question 65

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 66

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

Question 67

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

Question 68

The United States (and the world) is becoming older.

Question 69

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 70

Define Competitive Intelligence (CI) and list three ways that CI can be gathered.

Question 71

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 72

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 73

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 74

Political, governmental, and legal forces are always threats for both small and large organizations.

Question 75

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 76

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 77

The trend toward an older society is a threat for restaurants, hotels, and airlines.

Question 78

U.S. consumers spent $6.7 billion on legal marijuana in 2016.

Question 79

Intensity of competition ________ in lower-return industries.

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

Question 80

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.