Question 1

Opportunities allow a company to exploit conditions in the environment while threats can lead to damage to a company's integrity.

Accepted Answer

Opportunities are external factors that a company can leverage for growth, while threats are external challenges that can harm the company's performance or reputation.

Question 2

Because recessions and recoveries follow certain patterns, firms can study the economic environment to predict economic trends.This was particularly valuable in dealing with the recovery after the global recession of 2008-2009.

Accepted Answer

False

Question 3

The global segment of the external environment provides many opportunities for large corporations but does not represent an appropriate market segment for family business firms, even large ones.

Accepted Answer

Family businesses, including large ones, can also benefit from the global segment of the external environment by expanding their market reach and leveraging international opportunities.

Question 4

Scanning involves detecting meaning through early signals of environmental changes and trends.

Accepted Answer

The answer of Scanning involves detecting meaning through early signals...

Question 5

The UK's exit from the EU and political upheavals in Egypt, Tunisia, Libya, and Syria illustrate uncertainties in the political/legal segment of the general environment that could affect the performance of business firms.

Accepted Answer

These events represent significant political and legal changes that can create uncertainties and risks for businesses operating in or with these regions, affecting their performance.

Question 6

Age structure, geographic distribution, income distribution, interest rates, and process innovations are all elements of concern when studying the demographic segment of the general environment.

Accepted Answer

Age structure, geographic distribution, and income distribution are elements of the demographic segment, but interest rates and process innovations are part of the economic and technological segments, respectively.

Question 7

The bankruptcy filings by major corporations during the Great Recession illustrate that firms cannot directly control the general environment's segments.

Accepted Answer

The general environment includes factors like economic conditions, which are beyond the direct control of individual firms, affecting their operations and financial stability.

Question 8

The legislation introduced in the U.S.Congress during the early tenure of the Obama administration intended to reduce the amount of work U.S.companies outsource and is an example of a potential change in the sociocultural segment of the general environment.

Accepted Answer

The legislation aimed at reducing outsourcing is more related to the political/legal segment of the general environment, as it involves government policy and regulation.

Question 9

When firms analyze the external environment, they typically have complete and unambiguous data.

Accepted Answer

Firms often face incomplete and ambiguous data when analyzing the external environment due to the complexity and unpredictability of external factors.

Question 10

A firm that sells cannabis in the states of Colorado and Washington might consider expanding into California, as that state recently legalized the retail selling of cannabis.The firm may also want to examine other state laws to see where else cannabis sales are legal.However, it would be ineffective to develop a strategy to encourage legalization in states that currently prohibit it as a means of future expansion, since firms are generally unable to influence the political/legal segment of the external environment.

Accepted Answer

Firms can influence the political/legal environment through lobbying, advocacy, and public campaigns, potentially affecting legalization efforts in states where cannabis is currently prohibited.

Question 11

China allows its firms to copy, or pirate, software created by firms in the United States and other countries.The Chinese firms take the intellectual property created by the other companies and then sell the resulting products for a lower price, undercutting the sales of the companies that invested in the product development.This activity represents a threat in the general environment that might prevent the U.S.companies from achieving strategic competitiveness.

Accepted Answer

Piracy and intellectual property theft by Chinese firms can undermine U.S. companies' competitive advantage by reducing their market share and profitability, thus threatening their strategic competitiveness.

Question 12

Competitor analysis is focused on the factors and conditions influencing an industry's profitability potential.

Accepted Answer

Competitor analysis focuses on understanding the strengths, weaknesses, strategies, and capabilities of current and potential competitors, not the overall industry's profitability potential.

Question 13

Globalfocusing is often used by firms with high levels of international operations that further increase their internationalization by focusing on global niche markets.

Accepted Answer

The answer of Globalfocusing is often used by firms with...

Question 14

Early adopters of new technology often achieve higher market shares and higher returns than later adopters of the technology.

Accepted Answer

Early adopters can gain a competitive advantage by capturing market share and establishing brand loyalty before competitors enter the market.

Question 15

The industry environment directly influences a firm and its competitive actions and responses.

Accepted Answer

The industry environment includes factors such as competition, customer preferences, and regulatory changes, which directly impact a firm's strategies and operations.

Question 16

Although health care reform legislation was passed in the early part of the Obama administration, it continues to be a contentious issue for employers, employees, and politicians because of its increased expenses.These attitudes about health care reform make up the sociocultural segment of the general environment.

Accepted Answer

The sociocultural segment of the general environment includes societal attitudes and cultural values, which encompass public opinions and attitudes towards issues like health care reform.

Question 17

Firms can directly control the elements of the seven segments of the general environment.

Accepted Answer

Firms cannot directly control the elements of the seven segments of the general environment as these are external factors such as economic, political, and technological conditions that influence a firm's operations but are beyond its direct influence.

Question 18

The external environment facing business stays relatively constant over time.

Accepted Answer

The external environment is dynamic and can change due to factors like economic shifts, technological advancements, regulatory changes, and social trends.

Question 19

Demographic, economic, political/legal, sociocultural, technological, global, and sustainable physical are the seven elements comprising the general environment.

Accepted Answer

These seven elements are commonly recognized as the components of the general environment that can influence an organization's operations and decision-making processes.

Question 20

When Google studies the Internet user privacy policies of various nations, it is engaged in the forecasting component of the environmental analysis process.

Accepted Answer

Forecasting involves predicting future trends or events, while studying privacy policies is part of the scanning or monitoring component of environmental analysis, which involves gathering current information.

Quiz 2: The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis