Question 1

According to I/O theorists,which of the following contributes least to firm performance?
A) Economies of scale
B) Barriers to market entry
C) Product differentiation
D) Internal resources
E) Level of competitiveness

Accepted Answer

I/O theorists focus on external factors like market structure and industry conditions, so internal resources are considered less influential on firm performance compared to external factors like economies of scale, market entry barriers, and competitiveness.

Question 2

Assumptions should never be part of the planning process.

Accepted Answer

While it is important to challenge assumptions during the planning process, they cannot be completely avoided. Assumptions are often made based on available information and can help guide the planning process. However, it is important to acknowledge and test assumptions to minimize their potential impact on the success of the plan.

Question 3

Freund emphasizes that key external factors should be all of these except:
A) important to achieving long-term and annual objectives.
B) measurable.
C) relatively few in number.
D) applicable to all competing firms.
E) hierarchical in the sense that some will pertain to the overall company while others will be more narrowly focused.

Accepted Answer

The answer of Freund emphasizes that key external factors should...

Question 4

A total weighted score of 1.0 for an EFE Matrix indicates that the firm is responding in an outstanding way to existing opportunities and threats in its industry.

Accepted Answer

The answer of A total weighted score of 1.0 for...

Question 5

The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.
A) less important than
B) as important as
C) more important than
D) more common than
E) less common than

Accepted Answer

The I/O (Industrial Organization) approach emphasizes the importance of external factors, such as industry structure and competitive forces, over internal factors in determining a firm's competitive advantage.

Question 6

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.

Accepted Answer

When there is a strong dollar, American goods become more expensive in overseas markets. This is because a strong dollar increases the value of the currency relative to other currencies, making American products priced in dollars more expensive for foreign buyers.

Question 7

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.

Accepted Answer

Performing an external audit involves gathering information from as many managers and employees as possible to gain a comprehensive understanding of the organization's strengths and weaknesses. This input is necessary to identify areas that need improvement and determine potential risks to the organization. Therefore, it is essential to involve a broad range of stakeholders in the audit process.

Question 8

It is predicted that the United States will have how many racial or ethnic majorities by the year 2075?
A) None
B) One
C) Two
D) Three
E) Five

Accepted Answer

Current trends suggest that the United States will become a minority-majority nation by around 2045, meaning there will be no single racial or ethnic majority. By 2075, it is unlikely that a new majority will emerge, and thus the answer is none.

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

Accepted Answer

To perform an external audit, a company must gather competitive intelligence and information about external trends. While performing an internal audit may be helpful for identifying areas of weakness or potential risks, it is not required prior to an external audit. Approval from the SEC is not necessary for a company to conduct an audit, and hiring a consultant to develop a strategic plan is not directly related to performing an external audit. Therefore, option C is the most relevant and accurate.

Question 10

What happens when interest rates rise?
A) Discretionary income increases
B) The demand for discretionary goods increases
C) Discretionary income is unchanged
D) The demand for discretionary goods decreases
E) discretionary income increases and the demand for discretionary goods decreases

Accepted Answer

When interest rates rise, borrowing becomes more expensive, which leads to a decrease in the demand for discretionary goods as people have less money to spend after paying high interest rates on loans. Therefore, the correct choice is D, as it states that the demand for discretionary goods decreases.

Question 11

________ is not part of an external audit.
A) Analyzing competitors
B) Analyzing financial ratios
C) Analyzing available technologies
D) Studying the political environment
E) Analyzing social, cultural, demographic and geographic forces

Accepted Answer

Analyzing financial ratios is typically part of an internal audit, as it involves examining a company's own financial data and performance, rather than external factors.

Question 12

Which of the states below has the youngest average population?
A) Florida
B) Utah
C) West Virginia
D) Maine
E) Pennsylvania

Accepted Answer

Utah has the youngest average population according to the latest census data. In 2019, the median age in Utah was 31.9 years, compared to Florida (42.4), Maine (45.0), Pennsylvania (40.8), and West Virginia (42.9).

Question 13

The weights and total weighted scores in both a Competitive Profile Matrix and an EFE Matrix have the same meaning.

Accepted Answer

Both the Competitive Profile Matrix and the EFE Matrix use weighting to evaluate the importance of each factor. Therefore, the weights and total weighted scores have the same meaning in both matrices.

Question 14

Which type of trend is exemplified by the increasing number of two-income households in America?
A) Social
B) Economic
C) Cultural
D) Technological
E) Historical

Accepted Answer

The trend of increasing number of two-income households is primarily driven by economic factors such as rising cost of living and stagnant wages, making it necessary for families to have two sources of income to make ends meet.

Question 15

A Competitive Profile Matrix allows strategists to summarize and evaluate economic,social,cultural,demographic,environmental,political,governmental,legal,technological,and competitive information.

Accepted Answer

The answer of A Competitive Profile Matrix allows strategists to...

Question 16

Identifying and evaluating key social,political,economic,technological and competitive trends and events comprise
A) developing an effective mission statement.
B) conducting an internal audit.
C) performing an external audit.
D) formulating strategy.
E) implementing strategy.

Accepted Answer

Identifying and evaluating key social, political, economic, technological, and competitive trends and events is a part of performing an external audit. An external audit involves analyzing the external environment in which the organization operates and identifying opportunities and threats that may impact future performance. It is a key step in the strategic planning process. Developing an effective mission statement, conducting an internal audit, formulating strategy, and implementing strategy are all important steps in the strategic planning process, but they do not specifically involve analyzing the external environment.

Question 17

In an EFE Matrix,opportunities often receive higher weights than threats,but threats too can receive high weights if they are especially severe or threatening.

Accepted Answer

This statement is true. The EFE matrix is used to evaluate a company's external environment, and opportunities and threats are the two major factors considered. Generally, opportunities are given higher priority than threats because they represent potential benefits for the company. However, if a threat is particularly severe or threatening, it may receive a high weight in the EFE matrix as well.

Question 18

Regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix,the highest possible total weighted score for an organization is 4.0,and the lowest possible total weighted score is 0.0.

Accepted Answer

The answer of Regardless of the number of key opportunities...

Question 19

What effect do trends in the dollar's value have on companies in different industries and in different locations?
A) Significant and equal
B) Marginal and equal
C) Significant and unequal
D) Insignificant and unequal
E) No significant impact

Accepted Answer

Trends in the dollar's value can have a significant impact on companies in different industries and locations. For example, companies in export-oriented industries such as manufacturing may benefit from a weaker dollar as it makes their products more competitive in global markets. On the other hand, companies that rely on imports, such as retailers, may suffer due to the increased cost of goods. The impact can also vary based on the location of the company, as companies in countries with currencies tied to the dollar, such as many in Latin America or the Caribbean, may be more vulnerable to fluctuations. Therefore, the impact is significant and unequal across different industries and locations.

Question 20

The critical success factors in a Competitive Profile Matrix are often the same as those in an EFE Matrix.

Accepted Answer

The answer of The critical success factors in a Competitive...

Quiz 3: The External Assessment

According to I/O theorists,which of the following contributes least to firm performance?

Assumptions should never be part of the planning process.

Freund emphasizes that key external factors should be all of these except:

A total weighted score of 1.0 for an EFE Matrix indicates that the firm is responding in an outstanding way to existing opportunities and threats in its industry.

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

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

The process of performing an external audit needs to include

It is predicted that the United States will have how many racial or ethnic majorities by the year 2075?

To perform an external audit,a company first must

What happens when interest rates rise?

________ is not part of an external audit.

Which of the states below has the youngest average population?

The weights and total weighted scores in both a Competitive Profile Matrix and an EFE Matrix have the same meaning.

Which type of trend is exemplified by the increasing number of two-income households in America?

A Competitive Profile Matrix allows strategists to summarize and evaluate economic,social,cultural,demographic,environmental,political,governmental,legal,technological,and competitive information.

Identifying and evaluating key social,political,economic,technological and competitive trends and events comprise

In an EFE Matrix,opportunities often receive higher weights than threats,but threats too can receive high weights if they are especially severe or threatening.

Regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix,the highest possible total weighted score for an organization is 4.0,and the lowest possible total weighted score is 0.0.

What effect do trends in the dollar's value have on companies in different industries and in different locations?

The critical success factors in a Competitive Profile Matrix are often the same as those in an EFE Matrix.