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

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Question 91

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PPG Industries,the Pittsburgh-based manufacturer of paints,coatings,optical products,specialty materials,chemicals,glass,and fiber glass suffered serious failures in 1986 and 1987 when it attempted to diversify its offers.It used a technique to help it identify possible future strategies.What was it?

A) crowdsourcing
B) scenario analysis
C) competitive intelligence
D) monitoring

E) A) and B)
F) B) and C)

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Question 92

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Scenario planning is useful for anticipating major future changes in the external environment.

A) True
B) False

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Question 93

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The competitive environment consists of many factors that are particularly relevant to company strategy.This includes competitors,customers,and suppliers.

Steve Jobs,the former chairman of Apple,used intuition and judgment to forecast the future.

In 2014,Audi introduced the Q3 SUV at a base price of only $32,500.And BMW,with its 1-series,is another well-known example.Such cars,priced in the low $30,000s,compete more directly with products from broad-line manufacturers like Ford,General Motors,and Toyota.This suggests that members of a strategic group can overcome _____ barriers and migrate to other groups that they find attractive if they are willing to commit time and resources.

Environmental scanning and competitor intelligence provide important inputs for forecasting activities.

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.

Emerging sociocultural changes in the environment include

Which of the following is not a correct usage of the SWOT framework?

The Porter five-forces model is designed to help us understand how social attitudes and cultural values impact U.S.businesses. E. Porter has been the most commonly used analytical tool for examining the competitive environment. It describes the competitive environment in terms of five basic competitive forces.

The concept of strategic groups is also important to the external environment of a firm.

PPG Industries has developed four alternative futures based on differing assumptions about two key variables: the cost of energy and the extent of opportunity for growth in emerging markets.This is called demand monitoring.

Blockbuster,Borders,Circuit City,and Radio Shack are examples of firms that did not have good perceptual acuity.