Question 1

Discuss the I/O approach in relation to competitive advantage.

Accepted Answer

The answer of Discuss the I/O approach in relation to...

Question 2

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

Accepted Answer

Porter believes that the most powerful of the five competitive forces is the rivalry among competing firms. This is because intense competition can lead to price wars, decreased profits, and a struggle for market share. The other forces (potential development of substitute products, bargaining power of suppliers, bargaining power of consumers, and potential entry of new competitors) are still important but may not have as much impact on the industry as the level of rivalry among existing competitors.

Question 3

Standard and Poor's Industry Surveys include all of the following sections EXCEPT
A) Historic Environment
B) Industry Trends
C) How to Analyze a Company
D) Glossary of Industry Information
E) Comparative Company Financial Analysis

Accepted Answer

The answer of Standard and Poor's Industry Surveys include all...

Question 4

The Internet has made it _______ for firms to gather, assimilate, and evaluate information.
A) easier
B) harder
C) more expensive
D) less clear-cut
E) more time-consuming

Accepted Answer

The sentence indicates that the Internet has facilitated the process of gathering, assimilating, and evaluating information. Therefore, the correct answer is "easier."

Question 5

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

Accepted Answer

Backward integration involves a company acquiring its suppliers in order to have greater control over costs and reliability of supply. This can be an appropriate strategy when suppliers are unreliable or too costly.

Question 6

Without assumptions, planning would be
A) impossible.
B) easier.
C) difficult.
D) inexpensive.
E) intuitive.

Accepted Answer

Assumptions provide a basis for planning. Without assumptions, there would be no foundation on which to build a plan, making planning impossible.

Question 7

Which of the following is not a published source of external strategic information?
A) periodicals
B) television programs
C) journals
D) reports
E) directories

Accepted Answer

Television programs are not typically considered a published source of strategic information. The other options listed (periodicals, journals, reports, and directories) are all commonly used sources for gathering external strategic information.

Question 8

One difference between CPM and EFE is that
A) CPM includes both internal and external issues.
B) the weights and total weighted scores have different meanings.
C) CPM ratings range from 1 to 10.
D) CPM is performed only for the company, whereas EFE is performed for both the company and its competitors.
E) CPM is only used in small firms.

Accepted Answer

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Question 9

What level of bargaining power do consumers have when the products being purchased are standard or undifferentiated?
A) Marginal
B) Low
C) High
D) Negative
E) Negligible

Accepted Answer

When products are standard or undifferentiated, consumers have high bargaining power because they can easily switch to a substitute product. This puts pressure on the supplier to keep prices competitive and to maintain product quality to retain its customers.

Question 10

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) fluctuate.

Accepted Answer

When new firms are able to easily enter an industry, this typically means the barrier to entry is low. This results in more competition which tends to increase the intensity of competitiveness among firms. Thus, option B is the best choice.

Question 11

Intensity of competition ________ in lower-return industries.
A) is lowest
B) is nonexistent
C) is highest
D) is not important
E) fluctuates

Accepted Answer

Lower-return industries typically attract more competitors looking for any available profits, resulting in intense competition for market share and profitability.

Question 12

What is the range for a firm's total weighted score in an External Factor Evaluation Matrix?
A) 0 to 5
B) 0 to 4
C) 1 to 5
D) 1 to 4
E) 0 to 10

Accepted Answer

The answer of What is the range for a firm's...

Question 13

What is NOT one of Michael Porter's five competitive forces?
A) New entrants
B) Rivalry among existing firms
C) Bargaining power of unions
D) Bargaining power of suppliers
E) Bargaining power of buyers

Accepted Answer

The bargaining power of unions is not one of Michael Porter's five competitive forces. The other four are new entrants, rivalry among existing firms, bargaining power of suppliers, and bargaining power of buyers.

Question 14

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

Accepted Answer

Abstracts are typically published sources of information, such as summaries of research studies or articles. Therefore, they do not qualify as unpublished sources of external strategic information.

Question 15

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.

Accepted Answer

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Question 16

Identify five key economic variables that could represent major opportunities or threats to a bank in your town or city.

Accepted Answer

The answer of Identify five key economic variables that could...

Question 17

A total weighted score of _______ in an EFE Matrix indicates that the firm's strategies are NOT capitalizing on opportunities or avoiding external threats.
A) 0.0
B) 1.0
C) 2.5
D) 3.3
E) 4.0

Accepted Answer

The answer of A total weighted score of _______ in...

Question 18

What is the first step in designing an EFE Matrix?
A) Identifying key external factors in the industry
B) Summing the weighted score for each competitor
C) Calculating the sales of each competitor
D) Drawing the horizontal and vertical lines for the matrix
E) Determining four competitors

Accepted Answer

The first step in designing an External Factor Evaluation (EFE) Matrix is to identify the key external factors in the industry. These factors can include opportunities and threats from the macro environment, such as technological advancements, changes in government regulations, or shifts in consumer preferences. Once these factors have been identified, they can be weighted and scored to assess the overall competitiveness of the industry and the company's position within it.

Question 19

Discuss the process of performing an external audit.

Accepted Answer

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Question 20

What are educated assumptions about future trends and events called?
A) Wild guesses
B) Forecasts
C) Facts
D) Statistics
E) Premonitions

Accepted Answer

Educated assumptions about future trends and events are called forecasts. Forecasts are based on analyses of past and current data and can help individuals and organizations make informed decisions about the future. Wild guesses and premonitions are not based on data and are not reliable sources of information. Facts and statistics are based on past and current data but do not necessarily provide information about future trends and events.

Quiz 3: The External Assessment

Discuss the I/O approach in relation to competitive advantage.

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

Standard and Poor's Industry Surveys include all of the following sections EXCEPT

The Internet has made it _______ for firms to gather, assimilate, and evaluate information.

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

Without assumptions, planning would be

Which of the following is not a published source of external strategic information?

One difference between CPM and EFE is that

What level of bargaining power do consumers have when the products being purchased are standard or undifferentiated?

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

Intensity of competition ________ in lower-return industries.

What is the range for a firm's total weighted score in an External Factor Evaluation Matrix?

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

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

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.

Identify five key economic variables that could represent major opportunities or threats to a bank in your town or city.

A total weighted score of _______ in an EFE Matrix indicates that the firm's strategies are NOT capitalizing on opportunities or avoiding external threats.

What is the first step in designing an EFE Matrix?

Discuss the process of performing an external audit.

What are educated assumptions about future trends and events called?