Chapter 3 The External Assessment
67) ________ is NOT part of an external audit. A) Analyzing competitors B) Analyzing financial ratios C) Analyzing aaila!le tec"nologies #) $tudying t"e political enironment %) Analyzing Analyzing social& cultural& demograp"ic and a nd natural enironment forces 6') (dentifying and ealuating ey social& political& economic& tec"nological and competitie trends and eents comprise A) deeloping an effectie mission statement. B) conducting an internal audit. C) performing an external audit. #) formulating strategy. strategy. %) implementing strategy. 6*) T"e process of performing an external audit needs to include A) only top leel managers& as it is a planning function. B) as many managers and employees as possi!le. C) primarily front+line superisors. #) !et,een - to /0 managers for it to !e alid. %) stoc"olders and external goernment agencies. 70) To perform an external audit& a company first must A) get an approal from t"e $ecurities and %xc"ange Commission. B) perform an internal audit. C) gat"er competitie intelligence and information a!out external trends. #) "ire a consultant to deelop a compre"ensie strategic plan. %) all of t"e a!oe 7-) 1reund emp"asizes t"at ey external factors s"ould !e all of t"ese %2C%3T A) important to ac"ieing long+term and annual o!4ecties B) measura!le C) relatiely fe, in num!er #) applica!le to all competing firms %) "ierarc"ical in t"e sense t"at some ,ill pertain to t"e oerall company ,"ile ot"ers ,ill !e more narro,ly focused 7/) T"e (5O approac" to competitie adantage adocates t"at external factors are ________ internal factors in a firm ac"ieing competitie adantage. A) less important t"an B) eually important as C) more important t"an #) more common t"an %) less common t"an Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
78) According to (5O t"eorists& ,"ic" of t"e follo,ing contri!utes least to firm:s performance; A) %conomies of scale B) Barriers to maret entry C) 3roduct differentiation #) (nternal resources %) .$. is an example of a?n) ________ force affecting !usiness. A) social B) economic C) cultural #) tec"nological %) "istorical 7) @"at "appens ,"en interest rates rise; A) #iscretionary income increases B) T"e demand for discretionary goods increases C) #iscretionary income is unc"anged #) T"e demand for discretionary goods decreases %) #iscretionary income increases and t"e demand for discretionary goods decreases 76) @"at effect do trends in t"e dollar:s alue "ae on companies in different industries and in different locations; A) $ignificant and eual B) arginal and eual C) $ignificant and uneual #) (nsignificant and uneual %) No significant impact 77) (n general& ,"at "appens to American goods in oerseas marets ,"en t"ere is a strong dollar; A) T"ey are less expensie. B) T"ey are more attractie. C) T"ey are c"eaper. #) T"ey are more expensie. %) T"ey are desira!le.
7') (t is predicted t"at t"e >nited $tates ,ill "ae "o, many racial or et"nic ma4orities !y t"e year /07; A) None B) One C) T,o #) T"ree %) 1ie / Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
7*) T"e >nited $tates: population is ________. A) getting younger and less ,"ite B) getting younger and more ,"ite C) getting older and less ,"ite #) getting older and more ,"ite %) remaining sta!le as to age and racial mae up '0) T"e ,orld population is expected to gro, to an estimated ________ !illion in /0=. A) 6 B) 7 C) ' #) * %) -0 '-) 9a,aii& California& and ________ already "ae no ma4ority race or et"nic group. A) Ne, or B) Ne, ersey C) Ne, 9amps"ire #) Ne, exico %) all of t"e a!oe '/) @"o are t"e ,orld:s longest+liing people; A) Americans B) exicans C) (ndians #) 1ilipinos %) apanese '8) Americans ,ere on t"e moe in a population s"ift to _______& !ut t"e recession and "ousing !ust nation,ide "as slo,ed migration t"roug"out t"e >nited $tates. A) t"e 1rost!elt B) t"e $out" and @est C) t"e Nort"east and id,est #) t"e id,est and $out" %) Canada '=) apan:s elderly population ratio is _______ percent. A) -8 B) -7 C) -* #) // ') @"en an industry relies "eaily on goernment c ontracts& ,"ic" forecasts can !e t"e most important part of an external audit; A) %conomic B) 3olitical C) Tec"nological 8 Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
#) Competitie %) ultinational '6) C"anges in ,"ic" of t"e follo,ing can significantly affect firms; A) 3atent la,s B) Antitrust legislation C) Tax rates #) nited $tates C) T"e %> #) (ndia %) $,itzerland '*) @"ic" of t"e follo,ing "as largely refrained from protectionist measures; A) t"e %> B) t"e >.$. C) (ndia #) Dussia %) All of t"e a!oe *0) All of t"e follo,ing are political& goernmental& and legal aria!les t"at can represent ey opportunities or t"reats to organizations %2C%3T A) special tariffs B) enironmental protection la,s C) ,orld oil& currency& and la!or marets #) legislation on eual employment %) population c"anges !y race& age& sex& and leel of affluence *-) Not all sectors of t"e economy are eually affected !y tec"nological deelopmentsE t"e ________ industry is muc" more olatile t"an t"e ________ industry. A) textileE communications B) p"armaceuticalE forestry C) metalsE electronics #) forestryE communications = Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
%) textileE p"armaceutical */) @"ic" of t"e follo,ing sectors of t"e economy ,ould !e most impacted !y tec"nological deelopments; A) 1orestry B) Aeronautics C) Textiles #) etals %) 3aper *8) Collecting and ealuating information on competitors is essential for successful A) internal analysis. B) strategy ealuation. C) strategy formulation. #) strategy implementation. %) strategy management. *=) Competition in irtually all industries is ________. A) nonexistent B) intense C) neer cutt"roat #) easily aoida!le %) insignificant *) @"ic" of t"e follo,ing is NOT a c"aracteristic t"at descri!es t"e most competitie companies in America; A) #iestiture is essential to gro,t". B) 3eople mae a difference. C) (nnoate or eaporate. #) T"ere is no su!stitute for uality and no greater t"reat t"an failing to !e cost+competitie on a glo!al !asis. %) @"et"er it:s !roe or not& fix it. *6) A systematic and et"ical process for gat"ering and analyzing information a!out t"e competition:s actiities and general trends to furt"er a !usiness: o,n goals is called A) unet"ical !usiness practice. B) artificial intelligence. C) competitie intelligence. #) industrial espionage. %) competitie adantage. *7) ________ is not a !asic mission of a competitie intelligence program. A) 3roiding a general understanding of an industry B) 3roiding a general understanding of a company:s competitors C) (dentifying industry executies ,"o could !e "ired !y t"e firm #) (dentifying areas in ,"ic" competitors are ulnera!le and assessing t"e impact strategic actions ,ould "ae on competitors Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
%) (dentifying potential moes a competitor mig"t mae t"at ,ould endanger a firm:s position in t"e maret
*') @"ic" statement a!out !usiness intelligence is accurate; A) (ntelligence gat"ering is an unet"ical !usiness practice. B) Dunning an intelligence program reuires many people. C) Dunning an intelligence program reuires many computers and ot"er resources. #) Collecting intelligence a!out competitors iolates antitrust la,s. %) Business intelligence is not eual to espionage. **) T"e responsi!ilities of a director of competitie analysis include all of t"e follo,ing %2C%3T A) researc"ing special issues B) disseminating information on a timely !asis C) recognizing ,"at information is important and ,"o ne eds to no, #) conducting corporate espionage %) analyzing data -00) aret commonality can !e defined as A) t"e num!er and significance of marets t"at a firm competes in ,it" rials. B) t"e num!er and significance of points in common a firm "as ,it" its rials. C) t"e extent to ,"ic" t"e type of a firm:s internal resources are compara!le to a rial. #) t"e extent to ,"ic" t"e amount of a firm:s internal resources are compara!le to a rial. %) none of t"e a!oe -0-) (ntensity of competition ________ in lo,er+return industries. A) is lo,est B) is nonexistent C) is "ig"est #) is not important %) fluctuates -0/) @"at is NOT one of ic"ael 3orter:s fie competitie forces; A) Ne, entrants B) Dialry among existing firms C) Bargaining po,er of unions #) Bargaining po,er of suppliers %) Bargaining po,er of !uyers -08) According to 3orter& ,"at is usually t"e most po,erful of t"e fie competitie forces; A) 3otential deelopment of su!stitute products B) Bargaining po,er of suppliers C) Bargaining po,er of consumers #) Dialry among competing firms %) 3otential entry of ne, competitors 6 Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
-0=) @"eneer ne, firms can easily enter a particular industry& t"e intensity of competitieness among firms tends to A) stay t"e same. B) increase. C) decrease. #) neutralize. %) fluctuate. -0) (f suppliers are unrelia!le or too costly& ,"ic" of t"ese strategies may !e appropriate; A) 9orizontal integration B) Bac,ard integration C) aret penetration #) 1or,ard integration %) Concentric diersification -06) @"at leel of !argaining po,er do consumers "ae ,"en t"e products !eing purc"ased are standard or undifferentiated; A) arginal B)
7 Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
--0) >npu!lis"ed sources of external strategic information include all of t"e follo,ing %2C%3T A) a!stracts B) customer sureys C) maret researc" #) speec"es at professional and s"are"olders: meetings %) conersations ,it" stae"olders ---) @"ic" of t"e follo,ing is not a pu!lis"ed source of external strategic information; A) periodicals B) teleision programs C) 4ournals #) reports %) directories --/) $tandard and 3oor:s Industry Surveys include all of t"e follo,ing sections %2C%3T A) 9istoric %nironment B) (ndustry Trends C) 9o, to Analyze a Company #) Flossary of (ndustry (nformation %) Comparatie Company 1inancial Analysis --8) A total ,eig"ted score of _______ in an %1% atrix indicates t"at t"e firm:s strategies are NOT capitalizing on opportunities or aoiding external t"reats. A) 0.0 B) -.0 C) /. #) 8.8 %) =.0 --=) @"at is t"e first step in designing an %1% atrix; A) (dentifying ey external factors in t"e industry B) $umming t"e ,eig"ted score for eac" competitor C) Calculating t"e sales of eac" competitor #) #ra,ing t"e "orizontal and ertical lines for t"e matrix %) #etermining four competitors --) @"at is t"e range for a firm:s total ,eig"ted score in an %xternal 1actor %aluation atrix; A) 0 to B) 0 to = C) - to #) - to = %) 0 to -0
' Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
--6) One difference !et,een C3 and %1% is t"at A) C3 includes !ot" internal and external issues. B) t"e ,eig"ts and total ,eig"ted scores "ae different meanings. C) C3 ratings range from - to -0. #) C3 is performed only for t"e company& ,"ereas %1% is performed for !ot" t"e company and its competitors. %) C3 is only used in small firms.
* Copyrig"t /0-8 3earson %ducation& (nc. pu!lis"ing as 3rentice 9all
