Question 1

Describe and discuss the four activities of the external environmental analysis process.

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Question 2

Describe the seven segments of the general environment.

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Question 3

Competitor intelligence could ethically come from all the following EXCEPT

Accepted Answer

Eavesdropping is illegal and therefore obtaining competitor intelligence through this means would not be ethical.

Question 4

Once a firm has determined its competitor's future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop

Accepted Answer

The next step after analyzing competitors is to develop a response profile, which outlines potential actions or strategies the firm could take in response to its competitor's current strategy and future objectives. An environmental assessment and a marketing plan may be developed later in the process, and a task force may be formed to implement the chosen strategy. But the immediate next step is to create a response profile.

Question 5

Clarissa is a sales representative for a large pharmaceutical firm. While calling on one of her major clients, the purchasing director of a hospital, the client told her confidential information that a sales representative from a competing firm had passed on to him. The information completely contradicts Clarissa's firm's understanding of the competitor's business strategy, and would allow Clarissa's employer to gain many of the competitor's clients.

Accepted Answer

The ethical dilemma here is the right of competitors not to reveal certain information. Clarissa's client may have violated the competitor's trust by disclosing confidential information, and as a sales representative, Clarissa has a responsibility to respect the privacy and confidentiality of her competitors. It would be unethical for Clarissa to use this information to gain an unfair advantage over her competitor.

Question 6

What do firms need to know about their competitors? What legal and ethical intelligence gathering techniques can be used to obtain this information?

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Question 7

Competitor analysis focuses on

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Competitor analysis specifically refers to the analysis of firms that directly compete with the company. While other firms in the industry and potential entrants are worth considering, the focus of a competitor analysis is typically on direct competitors.

Question 8

Explain why it is important for organizations to analyze and understand the external environment.

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Question 9

Which of the following pairs of companies would be least likely to be examined together as part of competitive analysis?

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Question 10

Describe the factors that raise the competitive nature of an industry's rivalry.

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Question 11

All of the following are implications of strategic groups EXCEPT

Accepted Answer

The strength of the five forces may differ across strategic groups due to differences in industry structure, market characteristics, and other environmental factors. Therefore, option B is incorrect as it states that the strength of the five forces is the same across strategic groups. The other options are valid implications of strategic groups, such as competitive rivalry being greater within strategic groups than between them, and the likelihood of rivalry increasing as strategic groups become closer in terms of strategies.

Question 12

A competitor analysis includes all of the following EXCEPT competitor

Accepted Answer

Traditions are not necessarily relevant or useful in analyzing competitors. The other options, including future objectives, current strategy, and assumptions, are all important factors to consider when conducting a competitor analysis.

Question 13

Identify and describe the three major parts of the external environment. What is the purpose of the firm's collecting information about these aspects of its environment?

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Question 14

Competitor intelligence is

Accepted Answer

Competitor intelligence refers to the information that a firm gathers to understand its competitors' objectives, strategies, assumptions, and capabilities. It can be legally obtained through publicly available information or ethical means such as market research. Options A and B involve illegal and unethical methods to gather information, while option D is incorrect as Sarbanes-Oxley Act does not regulate competitor intelligence gathering.

Question 15

What is a firm's strategic group? What effect does the strategic group have on the firm?

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Question 16

Which of the following intelligence gathering techniques is most likely to be legal and ethical?

Accepted Answer

Attending trade show presentations given by a competitor's employees is a legal and ethical technique for gathering intelligence. This is because it involves gathering information that is publicly available and does not violate any laws or ethical standards. Hiring investigators to examine a competitor's trash, entering a competitor's production plant without authorization, and redirecting a competitor's emails are all illegal and unethical techniques that violate privacy laws and ethical standards.

Question 17

Identify the five forces that underlie the five forces model of competition. Explain briefly how they affect industry profit potential.

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Question 18

What are high exit barriers and how do they affect the competition within an industry?

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Question 19

Which of the following represents a competitive intelligence practice that is both legal and ethical?

Accepted Answer

Attending a trade show and gathering information about a competitor's products and services is a legal and ethical practice of competitive intelligence. However, options A, C, and D involve unethical or illegal practices such as soliciting confidential information from a competitor's employee, sharing confidential information with someone who has a potential conflict of interest, and selling confidential information to a non-competitor, respectively.

Question 20

All the following are ethical sources of data for external analysis EXCEPT

Accepted Answer

A competitor's confidential memos are not an ethical source of data and obtaining them without proper authorization would be considered unethical and potentially illegal. Trade shows, competitor's annual reports, and competitor's help wanted advertisements are all publicly available sources of information that can be used for external analysis.

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