Chapter2 exercise and test
一、TRUE/FALSE
1. The final result of successful strategic competitiveness is above-average returns.
2. The external environment facing business stays relatively constant over time.
3. Demographic, economic, political/legal, sociocultural, technological, and global are the six
4. Firms can directly control the elements of the six segments of the general environment.
5. An analysis of the general environment is usually focused on the future.
6. External environmental analysis should be conducted annually.
7. When firms analyze the external environment, they typically have complete and unambiguous data.
8. Boundary spanners are organizational employees in positions to interact with external constituents.
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9. Monitoring involves the development of a forecast of what might happen at a future point in time.
10. Without monitoring, a firm is left with a mass of data of unknown relevance.
11. Using sophisticated mathematical models, producing accurate forecasts of demand for products is fairly straightforward.
12. The objective of assessing the external environment is to determine the timing and significance of the
13. 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.
14. Because the health of a nation!ˉs economy affecs the performance of individual firms and industries,companies study the economic environment to identify changes, trends, and their strategic
15. The political/legal segment of the general environment is the arena in which organizations and interest groups compete for attention, resources and a voice in the laws and regulations guiding interactions among nations.
16. Firms are affected only by the governmental regulations of the country in
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which they are
headquartered.
17. Differences in work attitudes between French and American workers are categorized in the demographic segment of the general environment.
18. The importance that a society places on universal access to healthcare would be considered part of the sociocultural aspect of the external environment.
19. Early adopters of new technology often achieve higher market shares and higher returns than later
20. It is uncommon for a large firm to receive a majority of revenues from outside its home country.
21. The five forces model of competition focuses on the segments of the general environment.
22. In recent years, industry boundaries have become more sharply defined.
23. A high threat of new entrants keeps pricing pressures on existing firms, keeping consumers happy and making the industry attractive and profitable.
24. Switching costs, access to distribution channels, economies of scale, large numbers of competing firms, and slow industry growth are some of the entry
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barriers that may affect the threat of new entrants to an industry.
25. Suppliers are powerful when no satisfactory substitutes are available, the selling industry is relatively more concentrated than the purchasing industry, and switching costs are high.
26. The main competitive factor facing companies offering traditional telephone service is the existence of substitute products and services.
27. Typically, fast industry growth increases the vigor of retaliation by existing firms against a new industry rival.
28. High exit barriers are factors that cause a company to remain in an industry even though the profitability of doing may be questionable.
29. Generally, the stronger the competitive forces, the higher the profit potential of an industry.
30. An attractive industry is one that is characterized by high entry barriers, suppliers and buyers with strong bargaining power, low threats from substitute products, and low rivalry among firms.
31. Strategic groups are firms in different industries following the same or similar strategies.
32. The strengths of the five competitive forces are similar across strategic
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groups within an industry.
33. A firm experiencing intense rivalry with powerful competitors should energetically engage in
competitor analysis.
34. The process of competitor analysis should examine the competitor!ˉs future objectives, current strategy, assumptions, and capabilities.
35. Eavesdropping is an ethical way to obtain information about competitors!ˉ actions
36. Any competitor intelligence practice that is legal is also ethical.
二、MULTIPLE CHOICE
1. According to the text!ˉs Strategic Focus on Wl-Mart, which portion of the general environment is effecting Wal-Mart the LEAST:
a. Political/legal ¨C changes in how communities view the presence of Wal-Mart.
b. Global ¨C the influence of Wal-Mart as a leading importer.
c. Technological ¨CWal-Mart!ˉs initiatives due to environmental concerns
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d. Supplier power ¨C changes in the waysuppliers view Wal-Mart as a customer.
2. As the Strategic Focus feature in chapter 2 describes, Wal-Mart is the nation!ˉs largest employer and second-largest company by revenue. What does this suggest in terms of the industry structure?
a. Wal-Mart can exert considerable pressure as a buyer.
b. Wal-Mart’s presence in a market reduces rivalry.
c. Wal-Mart has no substitutes.
d. Wal-Mart is immune from the threat of new entrants.
3. Wal-Mart’s strategic group includes all of the following firms EXCEPT
a. Safeway, Kroger and other grocery stores.
b. Target, Sears, JC Penney and other department stores.
c. Costco and other warehouse clubs.
d. The Gap, Abercrombie & Fitch, and other specialty retailers.
4. Acme Valves, Inc., has been a successful player in the oil field supply
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industry in the last 15 years. Acme maintained its traditional strategy and product characteristics over this time period. But, Acme has experienced declines in sales and profits over the last four quarters. The CEO of Acme should
a. continue with the proven strategy because its returns over the long run are important.
b. focus on improving efficiency of production and cost control.
c. conduct an analysis of the external environment.
d. immediately begin making incremental adjustments to the traditional business strategy in
an effort to improve sales.
5. To be effective, when should environmental analysis be conducted?
a. on an on-going basis
b. quarterly
c. annually
d. every 3-5 years
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6. The ____ environment is composed of elements in the broader society that can influence an industry and the firms within it.
a. general
b. competitor
c. sociocultural
d. industry
7. The environmental segments that comprise the general environment typically will NOT include
a. demographic factors.
b. sociocultural factors.
c. substitute products or services.
d. technological factors.
8. Aardvark Corp. has three products. Two products together make up two-thirds of revenues and
constitute 50 percent of company profits. Aardvark!ˉ third product makes up
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one third of sales. With profitability far above the industry average, this product is responsible for one half of Aardvark’sprofits. Which of the following statements regarding assessment of the general environment is accurate for Aardvark?
a. The company should monitor the general environment for changes that might effect the
revenue of all products.
b. The company should monitor the general environment for changes that might effect the
profitability of the most profitable products.
c. The company should monitor the general environment for changes that might effect the
profitability of all products.
d. The company should monitor the general environment for changes that might effect the
revenue and profitability of all products.
9. Which of the following is NOT an activity used in the external environmental analysis process?
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a. Scanning
b. Decrypting
c. Monitoring
d. Assessing
10. Environmental scanning would be most important for which of the following organizations?
a. a provider of hospice services for the terminally ill
b. a web design company catering to small businesses
c. a neighborhood sewer and water utility
d. a manufacturer of household linens
11. The ethically questionable practice of placing !°ookies!± on website customers!ˉ personal hard drives is an example of using the Internet for
a. assessing.
b. monitoring.
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c. forecasting.
d. scanning.
12. When analysts develop feasible projections of future events and how quickly they will occur based on observed changes and trends, they are engaged in
a. scanning.
b. monitoring.
c. forecasting.
d. assessing.
13. A general environmental analysis can be expected to produce all of the following EXCEPT
a. objective answers.
b. recognition of environmental changes.
c. identification of organizational opportunities.
d. identification of organizational threats.
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14. The text details differences between U.S. and European perspectives on genetically modified foods. In which part(s) of an analysis of the general environment would this appear?
a. Political/legal.
b. Technological.
c. Global.
d. All of the above.
15. In analyzing the demographic segment of the general environment, one typically examines all of the following factors EXCEPT
a. age structure.
b. ethnic mix.
c. distribution of income.
d. cultural values.
16. Which of the following identified in an analysis of the general environment is an opportunity for an entrepreneur who wishes to open a business doing !°Fitness for Life!± physical conditioning service(strength, balance, and
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flexibility training) in a city of 100,000 people?
a. the average age of the population in his community is high
b. the level of unemployment in his community is high
c. a chiropractor and two independent physical therapists are located in his community
d. the average education level of the population in his community is low
17. Analyzing income distribution would include all of the following EXCEPT
a. the purchasing power of various age groups.
b. the discretionary income of various ethnic groups.
c. wage differentials between male and female employees working for a large manufacturer.
d. how income is distributed among regions of the U.S.
18. Demographic changes include variations in income distribution. Which of the following statements is true?
a. Firms are most interested in the consumers comprising the top ten percent
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of the
household income.
b. Consumers!ˉ real income hasbeen increasing steadily since 1976.
c. The general loss in real income has been somewhat offset by the increase in dual-career
couples.
d. Workforce diversity is making the concept of average income obsolete.
19. Trade barriers
a. are regulated by the International Monetary Fund (IMF).
b. are typically used to create trade alliances among neighboring countries.
c. have little effect on firms that operate in a purely domestic market.
d. attempt to protect products manufactured in the home country.
20. An analysis of the economic segment of the external environment would include all of the following EXCEPT
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a. interest rates.
b. international trade.
c. the strength of the U.S. dollar.
d. the move toward a contingent workforce.
21. Which of the following would be LEAST effected by a rapid changes in interest rates?
a. Auto dealers
b. Hospitals
c. Home builders
d. All would be equally effected
22. The economic environment refers to
a. the nature and direction of the economy in which a firm competes or may compete.
b. the economic outlook of the world provided by the World Bank.
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c. an analysis of how the environmental movement and world economy interact.
d. an analysis of how new environmental regulations will affect the U.S. economy.
23. Which of the following would NOT be identified in an analysis of the economic portion of the general environment?
a. The willingness of Chrysler!ˉs buyers to prchase large vehicles due to an increase in oil
prices.
b. The ability of Ford to issue new debt due to their recent financial performance.
c. The ability of BMW!ˉs buyers to finance carpurchases due to a change in interest rates.
d. The willingness of GM buyers to purchase new vehicles due to the threat of recession.
24. The political/legal segment of an environment represents
a. the political preferences of different ethnic groups in the society.
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b. the technological values of different political entities in society.
c. how organizations and governments mutually try to influence each other.
d. the system of regulations governments at all levels place on businesses.
25. One of the segments of the external environment tends to drive (heavily influence) many of the other segments. This segment is the ____ segment.
a. economic
b. sociocultural
c. technological
d. political/legal
26. An analysis of society!ˉs attitudes and values ould be conducted when studying the ____ segment of the general environment.
a. sociocultural
b. global
c. demographic
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d. economic
27. In a suburban community outside a city in Alabama, a retail store opened that specialized in dancewear for children and adults. It was moderately successful for five years until the local newspaper published an expos¨| that scanty lingerie stocked in the backof the store’s showroom was selling briskly to a certain clientele. Afterward, the store lost most of its customers and nearly closed. Which segment of the environment did the store owner fail to take into account when she began selling the lingerie?
a. the sociocultural segment
b. the economic segment
c. the demographic segment
d. the political/legal segment
28. The technological segment of environmental analysis includes
a. institutions and activities involved with creating new knowledge and translating that
knowledge into new outputs.
b. the determination of when machinery will need to be replaced in a given
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firm.
c. the need for new technology in order for a firm to gain a competitive advantage.
d. places where a firm!ˉs technology will allow that firm to dominate a given market.
29. Understanding how new knowledge can develop new products, processes, or materials is a result of analyzing the ____ segment of the general environment.
a. economic
b. political/legal
c. technological
d. global
30. The next critical technological opportunity for organizations is predicted to be
a. the Internet.
b. multiphasic interventions.
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c. biological engineering.
d. wireless communications.
31. A Midwestern bank has outsourced its customer service function to a firm in India. This is an example
of changes in the ____ segment of the general environment.
a. demographic
b. global
c. sociocultural
d. economic
32. Diverse work groups tend to be more creative and innovative, as well as more ____, than homogenous
work groups.
a. cohesive
b. easily influenced
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c. difficult to manage
d. subject to stagnation
33. The concepts of Guanxi, Wa, and Inhwa all convey the general idea of
a. entrepreneurial risk-taking.
b. interpersonal relationships.
c. the value of hard work.
d. personal achievement.
34. According to the text, Google has been sued by several media companies for violations of copyright law. Which of the following would be the most appropriate interpretation of these under general environmental and industry analysis?
a. A changing technological environment due to the rise of the Internet; increased rivalry in the broadcast industry.
b. A changing legal environment pertaining to the posting of copyrighted material on Internet sites; the challenges of controlling suppliers actions.
c. A changing sociocultural environment as people are more willing to watch
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television shows on their computer; the bargaining power of buyers who face low switching costs between watching shows on their computer versus their television.
d. A changing global environment as the market for television shows has expanded from domestic to international; the threat of new entrants with unique content available for viewing.
35. Google has influenced what portion of the general environment for other software firms?
a. Technological
b. Political/legal
c. Global
d. None of the above as firms are influenced by the general environment, they do not influence it.
36. All of the following represent areas where Google is most likely assessing and forecasting the general environment EXCEPT
a. copyright law and how it effects videos posted to YouTube.
b. technology and advertising on DoubleClick.
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c. copyright law and the scanning of millions of volumes of library books.
d. technology and its relationship with Microsoft.
37. Which of the five forces of competition is MOST threatening to Google?
a. rivalry among competing search engines
b. threat of substitutes
c. bargaining power of suppliers
d. threat of new entrants
38. An industry is defined as
a. a group of firms producing the same products or services.
b. firms producing items that sell through the same distribution channels.
c. firms that sell the same products or services to the same customer base.
d. a group of firms producing products that are close substitutes.
39. The likelihood of entry of new competitors is affected by ____ and ____.
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a. barriers to entry, expected retaliation of current industry organizations
b. the power of existing suppliers, buyers
c. the profitability of the industry, the market share of its leading firm
d. the demand for the product, the profitability of the competitors
40. Which of the following is NOT
a. expected competitor retaliation
b. economies of scale
c. customer product loyalty
d. bargaining power of suppliers
41. New entrants to an industry are more likely when
a. it is difficult to gain access to distribution channels.
b. economies of scale in the industry are high.
c. product differentiation in the industry is low.
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d. capital requirements in the industry are high.
42. Economies of scale refer to the fact that as the
a. quantity of product produced in a given time period increases, the cost of manufacturing each unit increases.
b. quantity of product produced in a given time period increases, the cost of manufacturing each unit remains constant.
c. quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases.
d. quantity of product produced in a given time period decreases, the cost of manufacturing each unit decreases.
43. AT&T’s bundling of high-speed Internet sevices, satellite television, and wireless phone services influences which of the five forces of industry structure the LEAST?
a. Rivalry between existing firms.
b. Threat of new entrants.
c. Bargaining power of buyers.
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d. Bargaining power of suppliers.
44. Product differentiation refers to the
a. ability of the buyers of a product to negotiate a lower price.
b. response of incumbent firms to new entrants.
c. belief by customers that a product is unique.
d. fact that as more of a product is produced the cheaper it becomes per unit.
45. Switching costs refer to the
a. cost to a producer to exchange equipment in a facility when new technologies emerge.
b. cost of changing the firm!ˉs strategic group.
c. one-time costs suppliers incur when selling to a different customer.
d. one-time costs customers incur when buying from a different supplier.
46. Frequent-guest rates offered by hotel chains are an attempt to
a. decrease competitors!ˉ accessto distribution channels.
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b. develop a cost advantage independent of scale.
c. increase customers!ˉ switching costs.
d. overcome the perishability of the hotel !°product.!
47. As customers come to believe that a firm!ˉs product is unique, this allows the firm to
a. decrease its advertising expenditures.
b. customize its product.
c. force other companies out of the market by lowering prices.
d. obtain loyal customers.
48. DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey. Although DWK is selling some of the products over the Internet, in order to gain economies of scale, the products must be sold in retail outlets. The main barrier to entry DWK is likely to encounter here is
a. government licensing and permits.
b. access to distribution channels.
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c. consumers!ˉ switching costs.
d. cost disadvantages independent of scale.
49. In the case of a retail business dependent on drive-in customers, the major cost disadvantage independent of scale would be
a. favorable locations are not available.
b. other competitors have proprietary product technology.
c. access to raw materials is difficult.
d. other competitors have government subsidies.
50. A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for this project. Which of the following statements is most likely to be true?
a. The cost of the marble will be expensive because of the bargaining power of the supplier.
b. The cost of the marble will be moderate because of the bargaining power of the buyer.
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c. The cost of the marble will be moderate because of economies of scale.
d. The cost of the marble will be expensive because of the high strategic stakes involved.
51. Suppliers are powerful when
a. satisfactory substitutes are available.
b. they sell a commodity product.
c. they offer a credible threat of forward integration.
d. they are in a highly fragmented industry.
52. In the airline industry, consolidation among fuel providers serving airport facilities would be considered as ____ factor in the five forces model of competition.
a. a reduction of the airlines!ˉ abilities to enjoy economies of scale
b. an increase in switching costs because the airlines have no choice but to use jet fuel and
other oil products
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c. an increase in the bargaining power of suppliers of a critical input
d. an increase in the intensity of rivalry among airlines for scarce resources
53. Blood banks are highly dependent on donors. In the terminology of industry analysis, which statement of donors is accurate?
a. Blood donors are suppliers and are powerful due to the critical nature of what they provide to the blood bank.
b. Blood donors are suppliers and are powerful due to their concentration relative to the blood bank.
c. Blood donors are buyers and are not due to low switching costs needed to change to alternative inputs.
d. Blood donors are buyers and are powerful due to the volume of blood needed.
54. The airline industry has long been dominated by two large aircraft suppliers, Boeing and Airbus. China has recently announced plans to begin the development and production of a new large aircraft. What effect will this have on the domestic passenger airline industry?
a. It will make the industry more attractive due to reduced supplier power.
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b. It will make the industry less attractive due to increased supplier power.
c. It will make the industry more attractive due to a new entrant.
d. It will make the industry less attractive due to a new entrant.
55. Golden Lotus, an exercise club targeting healthy individuals over 50, is located in a fast-growing city
in the Southwest. Which of the following factors that may have an effect on the success of Golden Lotus is the most directly controllable by the company?
a. the socio-cultural environment
b. the demographics of the environment
c. the economy of the local area
d. the power of the customers/buyers
56. Buyers are powerful when
a. there is a threat of forward integration.
b. they purchase a small proportion of the supplier!ˉs output.
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c. switching costs are low.
d. the buyers!ˉ industry is fragmented.
57. The highest amount a firm can charge for its products is most directly affected by
a. expected retaliation from competitors.
b. the cost of substitute products.
c. variable costs of production.
d. customers!ˉ high switching costs.
58. The threat from substitutes is high when
a. switching costs are high.
b. the substitute product!ˉs price is lower than the industry product!ˉs price
c. the quality of the substitute product is lower than the quality of the industry!ˉs product.
d. the substitute product stimulates new process innovations within the industry.
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59. All of the following are forces that create high rivalry within an industry EXCEPT
a. numerous or equally balanced competitors.
b. high fixed costs.
c. fast industry growth.
d. high storage costs.
60. The existence of price wars in the airline industry indicates that
a. customers are relatively weak because of the high switching costs created by frequent flyer programs.
b. the industry is moving toward differentiation of services.
c. the competitive rivalry in the industry is severe.
d. the economic segment of the external environment has shifted, but airline strategies have not changed.
61. A manufacturer of washing machines has expanded its plant and has created excess capacity, just as the general economy has taken a downturn. The company is likely to
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a. raise prices on washing machines to offset lost sales.
b. be vulnerable to new entrants to an attractive market.
c. suffer from intense rivalry from international manufacturers.
d. offer rebates and incentives for customers who purchase washing machines.
62. When rival firms compete aggressively by trying to attract competitors’customers, this might be an indication of
a. an industry with low exit barriers.
b. increasing economies of scale.
c. slow industry growth.
d. high bargaining power among buyers.
63. Mighty Green, a residential lawn chemical manufacturer, is committed to gaining market share in its industry. Mighty Green
a. is likely to raise the level of competitive rivalry in the industry.
b. probably has top management who are affected by emotional barriers to exit.
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c. has decided that long-run above-average returns are not important.
d. will probably embark on an acquisition strategy.
64. Rivalry between fast food restaurants is intense due in part to
a. low geographic saturation of the market.
b. the high differentiation between competing outlets.
c. the low threat of supplier forward integration.
d. the existence of many, non-differentiated competitors.
65. To combat substitution from cable and wireless companies, phone companies have been creating strategic alliances with satellite companies to offer TV service. This is an example of an attempt to
a. reduce the strategic stakes in the communications industry.
b. increase economies of scale.
c. differentiate their services to customers.
d. lessen the bargaining power of suppliers.
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66. Circuit Corp. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component which is an essential differentiating feature for most of their consumer products. The costs to manufacture this component have risen sharply in recent months. Internal cost accounting estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely?
a. Circuit will likely continue to manufacture the component, even at a loss, due to low
supplier power.
b. Circuit will likely continue to manufacture the component, even at a loss, due to high
strategic stakes.
c. Circuit will likely discontinue manufacture the component due to low strategic stakes.
d. Circuit will likely discontinue manufacture the component due to high supplier stakes.
67. Exit barriers to a firm include all of the following EXCEPT
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a. generic assets.
b. loyalty to employees.
c. governmental concern about job loss.
d. restrictive labor agreements.
68. An owner of a stable of racehorses has been earning below-average returns for over 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because \"racing is in my blood.\" This individual is probably still racing horses because of
a. high barriers to exit.
b. high switching costs.
c. high fixed costs.
d. low levels of competitive rivalry.
69. According to the five factors model, an attractive industry would have all of the following characteristics EXCEPT
a. low barriers to entry.
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b. suppliers with low bargaining power.
c. a moderate degree of rivalry among competitors.
d. few good product substitutes.
70. According to the five forces model, an unattractive industry would include all of the following characteristics EXCEPT
a. low economies of scale needed for new firms to enter.
b. low supplier power due to commodity inputs.
c. high threat of substitute products due to a large number of low cost alternatives.
d. high bargaining power of buyers due to low switching costs.
71. The competition within each strategic group is
a. more intense than is the competition between strategic groups.
b. less intense than is the competition between strategic groups.
c. typically very low.
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d. an unknown factor in the analysis of competitive practices within a firm!ˉs strategic group.
72. Firms within strategic groups
a. follow dissimilar strategies.
b. follow similar strategies across certain dimensions.
c. typically engage in greater amounts of intergroup rivalry than intragroup rivalry.
d. exist almost exclusively in the manufacturing sector.
73. Sirius and XM, both satellite radio providers, are examples of
a. firms in a fragmented industry.
b. members of a strategic group.
c. competitors who belong to different strategic groups because of different customer
characteristics.
d. companies that have been unable to achieve synergy in their markets.
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74. As the world!ˉs top provider of computer products and services, IBM
a. is not concerned with monitoring competitors.
b. monitors only competitors in their strategic group.
c. monitors competitors both within and outside their strategic group.
d. monitors all firms.
75. Competitor analysis focuses on
a. firms with which the company competes directly.
b. firms that produce products that are substitutes.
c. all firms in the industry.
d. companies that might enter the industry.
76. Which of the following pairs of companies would be least likely to be examined together as part of competitive analysis?
a. Home Depot and Lowes
b. Boeing and Airbus
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c. IBM and Microsoft
d. XM and Sirius satellite radio
77. Competitor intelligence is
a. legally or illegally-gained data about competitors’internal strategic processes andcompetitive decisions.
b. strategic information gained from industrial espionage targeting international competitors.
c. the data that the firm gathers to understand competitors’objectives, strategies,assumptions, and capabilities.
d. illegal to gather under the Sarbanes-Oxley Act.
78. Developing an anticipated response profile for each competitor
a. is typically carried out by the marketing department.
b. is one of the main concerns of organizational executives.
c. is often neglected.
d. is considered to be legal but unethical.
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79. A competitor analysis includes all of the following EXCEPT competitor
a. objectives.
b. capabilities.
c. assumptions.
d. traditions.
80. Clarissa is a sales representative for a large pharmaceutical firm. While calling on one of her major clients, the purchasing director of a hospital, the client told her confidential information that a sales representative from a competing firm had passed on to him. The information completely contradicts Clarissa’s firm’s understanding of the competir’s business strategy, and would allow Clarissa’employer to gain many of the competitor!ˉs clients.
a. There is no ethical or legal concern here for Clarissa.
b. The ethical dilemma is not Clarissa’s buther client’s, since he passed on confidentialinformation to her voluntarily.
c. The ethical dilemma here is the right of competitors not to reveal certain information.
d. This is an example of ethical competitor intelligence obtained as
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eavesdropping.
81. All the following are ethical sources of data for external analysis EXCEPT
a. trade shows.
b. conversations with customers.
c. business rumors and !°the grapevine.!
d. a competitor!ˉs confidential memos.
82. Competitor intelligence could ethically come from all the following EXCEPT
a. court records.
b. financial reports.
c. trade show discussions.
d. eavesdropping.
83. Which of the following represents a competitive intelligence practice that is both legal and ethical?
a. A firm hires a competitor!ˉs employee andasks that employee to share the
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names and addresses of business contacts from his/her previous job.
b. An executive attends a trade show solely to obtain a competitor!ˉs brochures, listen to salespitches, and ask questions about the competitor!ˉs products.
c. A city council member shares information about the decision process for selecting a contractor to build a new library wing with his wife, an executive with a construction firm bidding on the contract.
d. A marketing manager at Smith-Phillips, Inc., sells confidential plans for the company’sexpansion into the Far East to a firm that is not a direct competitor.
84. Which of the following intelligence gathering techniques is most likely to be legal and ethical?
a. hiring investigators to examine the competitor!ˉs trash
b. entering a competitor!ˉs production plant without authorization
c. redirecting a competitor!ˉs emails to one!ˉs own compan
d. attending trade show presentations given by a competitor!ˉs employees
三、ESSAY
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1. Explain why it is important for organizations to analyze and understand the external environment.
2. Identify and describe the three major parts of the external environment. What is the purpose of the firm’s collecting information about these aspects of its environment
3. Describe and discuss the four activities of the external environmental analysis process.
4. Describe the six segments of the general environment.
5. Identify the five forces that underlie the five forces model of competition. Explain briefly how they
6. Describe the factors that raise the competitive nature of an industry!ˉs rivalry
7. What are high exit barriers and how do they affect the competition within an industry?
8. What is a firm!ˉs strategic group? Whateffect does the strategic group have on the firm?
9. What do firms need to know about their competitors? What legal and ethical intelligence gathering techniques can be used to obtain this information?
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四、CASE
NARRBEGIN: Case Scenario 02-01
Case Scenario 1: The Boys and Girls Club.
The Boys and Girls Club (BGC) is a national non-profit organization geared to provide America’s
youth with the tools and skills they need to become healthy adults, responsible citizens, and effective leaders. By bringing parents, neighbors, educators, and civic leaders together with our youth, BGC believes it can instill these crucial life lessons at an age when they!ˉre mst needed. The national organization is headquartered in Atlanta, GA, and serves as a service hub for over 3,700 club locations around the U.S. Each local club is directed by a volunteer board of directors and staffed by professional youth development workers (usually including an executive director, a program director, and an arts director) and many volunteers who just enjoy working with young people and want to make a difference in their lives. While affiliated with the national center, each local BGC is locally funded.
NARREND
1. (Refer to Case Scenario 1) How are the various facets of the general environment (Table 2.1 in
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Strategic Management) likely to be important for BGC?
2. (Refer to Case Scenario 1) Why would attention focused on victims of natural disasters be a threat to the BGC?
3. (Refer to Case Scenario 1) How might the BGC respond to threats to their donations at both local and national levels?
NARRBEGIN: Case Scenario 02-02
Case Scenario 2: B.B. Mangler.
B.B. Mangler is a top U.S. business-to-business distributor of maintenance, repair, and service
equipment, components, and supplies such as compressors, motors, signs, lighting and welding
equipment, and hand and power tools. Its industry is typically referred to as MRO, which is an
acronym for maintenance, repair, and supplies. MRO products are typically small, fairly inexpensive,(light bulbs and washers), but often needed on short notice. It states its strategy as having the capacity to offer an unmatched breadth of lowest total cost MRO solutions to business.”Mangler’s GoMR sourcing center for indirect spot buys locates products through its database of 8,000
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suppliers and 5 million products. Mangler has 388 physical branches in the U.S., including Puerto Rico (90% of sales),184 in Canada, and 5 in Mexico. Customers include contractors, service and maintenance shops, manufacturers, hotels, governments, and health care and educational facilities. Mangler also provides materials-management consulting services.
4. (Refer to Case Scenario 2) Historically, Mangler appears to have relied on its physical locations for market presence in the U.S. and northern South America. What threats does the Internet pose to its location-based strategy?
5. (Refer to Case Scenario 2) What opportunities does the Internet provide to Mangler, both domestically and internationally?
6. (Refer to Case Scenario 2) How should Mangler respond to the threat of new Internet-based entrants?
NARRBEGIN: Case Scenario 02-03
Case Scenario 3: Barracuda Inc.
Barracuda Inc. is a lamp fixture manufacturer that is considering an entry strategy into the U.S. home furnishings manufacturing industry. The existing landscape consists of many players but none with a controlling share. There are presently 2500 home furnishings firms, and only 600 of those have over 15 employees. Average net profit after tax is between 4 and 5%. While the industry is
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still primarily comprised of single-business family-run firms that manufacture furniture domestically, imports are increasing at a fairly rapid rate. Some of the European imports are leaders in contemporary design. Relatively large established firms are also diversifying into the home furnishings industry via acquisition. Supplier firms to the home furnishings industry are in relatively concentrated industries (like lumber, steel, and textiles). Retailers, the intermediate customer of the home furnishings industry, have been traditionally very fragmented. Customers have many products to choose from, at many different price points, and few home furnishing products have strong brands. Also, customers can switch easily among high and low-priced furniture and other discretionary expenditures (spanning big screen TVs to the choice of postponing any furniture purchase entirely).
7. (Refer to Case Scenario 3) Using the five-forces framework, summarize the opportunities and threats facing Barracuda as it considers entry into the home furnishings manufacturing industry. Which threats are greatest to current incumbents?
8. (Refer to Case Scenario 3) How intense is competitive rivalry likely to be among incumbents of the home furnishings manufacturing industry?
9. (Refer to Case Scenario 3) Is the furniture industry described above attractive?
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