Question 1

Rivalry is not always cutthroat; sometimes, it can be gentlemanly.

Accepted Answer

A) True 
 B)False

Question 2

Using the Cuusoo System, Lego develops ideas that are generated by the many children and adults who create a model, take photos, write project descriptions, and submit their idea on the Lego website. This is an example of using __________ to develop new products.

Accepted Answer

A)  sociocultural data
B)  demographic data
C)  technological data
D)  crowdsourcingE) A) and B)
F) A) and C)

Question 3

Code of Ethics guidelines can assist companies in avoiding aggressive competitive intelligence gathering that results from illegal behaviors.

Accepted Answer

A) True 
 B)False

Question 4

When the management frame of reference gets out of touch with the realities of the actual business situation, what can happen to the firm?

Accepted Answer

A)  The company business strategy no longer works.
B)  Management gets across-the-board raises.
C)  Management perceptual acuity improves.
D)  It becomes easier to maintain competitive advantage.E) B) and D)
F) A) and B)

Question 5

Executives must be careful to avoid spending so much time and effort tracking the actions of ___________ that they ignore ____________.

Accepted Answer

A)  competitors; customers
B)  customers; competitors
C)  existing customers; existing competitors
D)  traditional competitors; new competitorsE) B) and D)
F) A) and B)

Question 6

A danger of forecasting discussed in the text is that

Accepted Answer

A)  in most cases, the expense of collecting the necessary data exceeds the benefit.
B)  the retrospective nature of forecasting provides little information about the future.
C)  managers may view uncertainty as black and white while ignoring important gray areas.
D)  it can create legal problems for the firm if regulators discover the company is making forecasts.E) C) and D)
F) B) and C)

Question 7

To understand the business environment of a particular firm, you need to analyze both the general environment and the firm industry and competitive environment.

Accepted Answer

A) True 
 B)False

Question 8

A sharp increase in interest rates, for example, tends to have more impact on providers of higher-priced goods (e.g., Porsches) than on providers of lower-priced goods (e.g., Chevrolet Cobalt), whose customer base is much more price-sensitive.

Accepted Answer

A) True 
 B)False

Question 9

Technological innovations can create entirely new industries and alter the boundaries of industries.

Accepted Answer

A) True 
 B)False

Question 10

SWOT analysis is useful in part because it obliges the firm to act proactively by putting an emphasis on identifying opportunities and threats that constrain the action choices a firm might make as a result of its internal and external environmental scan.

Accepted Answer

A) True 
 B)False

Question 11

If companies miscalculate the market, opportunities will be lost.

Accepted Answer

A) True 
 B)False

Question 12

A Motel 6 executive indicates that he regularly reviews the number of rooms in the budget segment of the industry in the United States and the difference between the average daily room rate and the consumer price index (CPI). This is an example of Competitive Intelligence.

Accepted Answer

A) True 
 B)False

Question 13

In the SWOT framework, ______________ are internal factors that are specific to the company.

Accepted Answer

A)  strengths and opportunities
B)  strengths and threats
C)  threats and weaknesses
D)  strengths and weaknessesE) A) and B)
F) A) and C)

Question 14

Ted Turner saw the potential of 24-hour news before anyone else. This is an example of perceptual acuity.

Accepted Answer

A) True 
 B)False

Question 15

Another value of strategic grouping is that it helps a firm identify groups whose competitive position may be marginal or tenuous.

Accepted Answer

A) True 
 B)False

Question 16

The Apple iPod was enormously successful due in large part to the company strategy of using

Accepted Answer

A)  substitute products.
B)  technical savvy.
C)  complementors.
D)  sophisticated software.E) B) and C)
F) None of the above

Question 17

Which is considered a force in the five-forces model?

Accepted Answer

A)  increased deregulation in an industry
B)  the threat of government intervention
C)  recent technological innovation
D)  rivalry among competing firmsE) A) and D)
F) B) and C)

Question 18

Perceptual acuity can be improved by sitting alone and not consulting others.

Accepted Answer

A) True 
 B)False

Question 19

It is not important to consider the potential impact of government regulation when developing new innovations.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following firms would likely pose the least competitive threat?

Accepted Answer

A)  a firm in the same industry and in the same strategic group
B)  a competitor to your product where a high switching cost exists
C)  a firm that produces substitute goods to your product line
D)  a firm in the same industry and in the nearest strategic group looking to join your groupE) A) and B)
F) A) and C)

Exam 2: Analyzing the External Environment of the Firm: Creating Competitive Advantages

A sharp increase in interest rates, for example, tends to have more impact on providers of higher-priced goods (e.g., Porsches) than on providers of lower-priced goods (e.g., Chevrolet Cobalt), whose customer base is much more price-sensitive.

Correct AnswerverifiedShow Answer

Code of Ethics guidelines can assist companies in avoiding aggressive competitive intelligence gathering that results from illegal behaviors.

Correct AnswerverifiedShow Answer

Another value of strategic grouping is that it helps a firm identify groups whose competitive position may be marginal or tenuous.

Correct AnswerverifiedShow Answer

In the SWOT framework, ______________ are internal factors that are specific to the company.

Correct AnswerverifiedShow Answer

Which of the following firms would likely pose the least competitive threat?

Correct AnswerverifiedShow Answer

Technological innovations can create entirely new industries and alter the boundaries of industries.

Correct AnswerverifiedShow Answer

Which is considered a force in the five-forces model?

Correct AnswerverifiedShow Answer

A danger of forecasting discussed in the text is that

Correct AnswerverifiedShow Answer

Executives must be careful to avoid spending so much time and effort tracking the actions of ___________ that they ignore ____________.

Correct AnswerverifiedShow Answer

The Apple iPod was enormously successful due in large part to the company strategy of using

Correct AnswerverifiedShow Answer

SWOT analysis is useful in part because it obliges the firm to act proactively by putting an emphasis on identifying opportunities and threats that constrain the action choices a firm might make as a result of its internal and external environmental scan.

Correct AnswerverifiedShow Answer

Rivalry is not always cutthroat; sometimes, it can be gentlemanly.

Correct AnswerverifiedShow Answer

If companies miscalculate the market, opportunities will be lost.

Correct AnswerverifiedShow Answer

It is not important to consider the potential impact of government regulation when developing new innovations.

Correct AnswerverifiedShow Answer

To understand the business environment of a particular firm, you need to analyze both the general environment and the firm industry and competitive environment.

Correct AnswerverifiedShow Answer

A Motel 6 executive indicates that he regularly reviews the number of rooms in the budget segment of the industry in the United States and the difference between the average daily room rate and the consumer price index (CPI). This is an example of Competitive Intelligence.

Correct AnswerverifiedShow Answer

Perceptual acuity can be improved by sitting alone and not consulting others.

Correct AnswerverifiedShow Answer

Ted Turner saw the potential of 24-hour news before anyone else. This is an example of perceptual acuity.

Correct AnswerverifiedShow Answer

When the management frame of reference gets out of touch with the realities of the actual business situation, what can happen to the firm?

Correct AnswerverifiedShow Answer

Using the Cuusoo System, Lego develops ideas that are generated by the many children and adults who create a model, take photos, write project descriptions, and submit their idea on the Lego website. This is an example of using __________ to develop new products.

Correct AnswerverifiedShow Answer

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Executives must be careful to avoid spending so much time and effort tracking the actions of _ that they ignore __.

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