Question 1

Developing a political strategy by the newly formed General Motors would likely be ineffective as firms are generally unable to influence the political/legal environment.

Accepted Answer

While it is true that firms cannot directly control political and legal environments, they can still develop effective political strategies to navigate them. Lobbying, engaging in public relations campaigns, and forming alliances with other businesses or interest groups are some examples of political strategies that firms can use to influence the political process.

Question 2

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 statement accurately describes the sociocultural segment of the general environment and how it pertains to the issue of health care reform.

Question 3

The European sovereign-debt crisis 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

The statement correctly identifies how uncertainties in the political/legal segment of the general environment, such as the European sovereign-debt crisis and political upheavals in the Middle East and North Africa, can impact the performance of business firms.

Question 4

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

The answer of Age structure, geographic distribution, income distribution, interest...

Question 5

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

Accepted Answer

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

Question 6

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 they are external factors that can only be influenced indirectly.

Question 7

The objective of assessing the external environment is to determine the timing and importance of the effects of environmental changes and trends on the strategic management of the firm.

Accepted Answer

Assessing the external environment helps in understanding the impact of environmental changes and trends on the strategic management of the firm, thereby helping in determining the timing and importance of these effects.

Question 8

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

Accepted Answer

The industry environment is comprised of seven elements, including demographic, economic, political/legal, sociocultural, technological, global, and physical factors.

Question 9

The bankruptcy filings by General Motors and Chrysler Corporation during the Great Recession illustrate that firms cannot directly control the general environment's segments.

Accepted Answer

The general environment is comprised of factors such as economic conditions, political/legal issues, technological advancements, and sociocultural trends, which cannot be controlled directly by firms. The bankruptcies of GM and Chrysler were affected by factors such as the global economic crisis, rising fuel prices, changing consumer preferences, and competition from foreign automakers, all of which were beyond their control.

Question 10

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

Accepted Answer

The answer of Competitor analysis is focused on the factors...

Question 11

The external environment facing business stays relatively constant over time.

Accepted Answer

The external environment facing business is constantly changing and evolving due to various factors such as economic conditions, technology, politics, and social trends. Businesses need to regularly assess and adapt to these changes in order to remain competitive and successful.

Question 12

Contrary to popular belief, the global segment of the external environment does not provide many opportunities for firms that recently experienced low growth and profits coming from emerging markets.

Accepted Answer

The global segment of the external environment can provide significant opportunities for firms, especially in emerging markets, due to factors like economic growth, new consumer bases, and potential for innovation and expansion.

Question 13

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 answer of The legislation introduced in the U.S. Congress...

Question 14

Scanning involves detecting meaning through early signals of environmental trends.

Accepted Answer

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

Question 15

Monitoring involves the development of a forecast of what might happen at a future point in time.

Accepted Answer

Monitoring involves observing and checking the progress or quality of something over a period of time, not forecasting future events.

Question 16

In recent times, business leaders have become more confident in the ability of economists to provide valid and reliable predictions about the world's economic environment.

Accepted Answer

Business leaders often express skepticism about economists' predictions due to the complexity and unpredictability of global economic factors, which can lead to varying levels of confidence in their forecasts.

Question 17

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

Accepted Answer

Early adopters of new technology have the advantage of being ahead of the curve and have the ability to differentiate themselves from competitors who are slower to adopt. This can result in higher market shares and higher returns. As more competitors adopt the technology, the advantage of being an early adopter decreases.

Question 18

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

Accepted Answer

Firms rarely have complete and unambiguous data when analyzing the external environment due to factors such as limited information, uncertainty, and complexity of the external factors.

Question 19

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, which involves gathering current information.

Question 20

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

Accepted Answer

The industry environment has a significant impact on a firm's strategy and competitive behavior. Factors such as the level of competition, potential new entrants, and bargaining power of suppliers and buyers all affect a company's decisions and tactics. Therefore, it is true that the industry environment directly influences a firm and its competitive actions and responses.

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