Deck 2: Evaluating the Macro-Environment

Question 1

The macro-environment is also referred to as the _______________ environment.

Answer 1

General environment

Question 2

The competitive environment can be seen as being influenced by five major forces: potential entrants, power of buyers, power of suppliers, competitive rivalry, and:

A) Strategic groups
B) Substitutes
C) Competing firms
D) Competing brands

Answer 2

B

Question 3

Environmental analysis involves the activities of scanning, ________, and forecasting.

Answer 3

Monitoring

Question 4

Porter (1985) has argued that an analysis of the organization's competitive environment provides more useful data than an analysis of the macro-environment.

Question 5

Threats faced by an organization that have the potential to undermine the way they compete are known as _________________

Question 6

The aim of macro-environmental analysis is to aid the organization in discerning trends in the macro-environment which might impact upon its industry and markets.

Question 7

It allows the company to create a new performance trajectory for consumers based on different attributes than those of the existing technology used by the incumbent firm. This business activity is known as: Please select all that apply.

A) Disruptive innovation
B) Sustaining innovation
C) To enhance the performance of the existing technology
D) Discontinuities with the existing technology

Question 8

Fahey and Narayanan (1986) suggest a number of goals for an analysis of the general environment. These include: Please select all that apply.

A) To understand current and potential environmental changes
B) To provide useful information for decision makers
C) To foster a culture of strategic thinking from being aware of the environment
D) To predict the future so that the organization can pre-empt the changes

Question 9

Organizations must be diligent in continually scanning the macro-environment for weak signals.

Question 10

British Petroleum famously used scenario planning to predict the impact of OPEC on the oil industry.

Question 11

The oil multinational Royal Dutch Shell uses the technique of _______________ to help it generate strategic options.

Question 12

Van Der Heijden (1996) identifies three main types of uncertainty. The least uncertain category is:

A) Risks
B) Structural uncertainties
C) Unknowables
D) Weak signals

Question 13

Scenario planning is most effective when the imagined scenarios are: Please select all that apply.

A) The most likely outcome
B) Plausible
C) Beyond the most likely outcome
D) Challenging

Question 14

Gladwell (2000) came up with the idea of the ____________________ to explain how seemingly small events can have profound impacts on the environment.

Question 15

Barely perceptible changes in the environment whose impact has yet to be felt are known as ____________.

Question 16

Scenario planning helps to overcome many of the shortcomings of traditional decision-making methods because: Please select all that apply.

A) It is an approach to decision-making under dynamic conditions.
B) It allows us to overcome some of the biases and imperfect reasoning of human beings.
C) The organization is more likely to make a certain decision.
D) The organization is more likely to be prepared for possible futures.

Question 17

Which of the following factors is the most 'knowable' in terms of predicting the future?

A) Future oil prices
B) Interest rates
C) The population profile of the country
D) Outcomes of political elections

Question 18

In a process of building scenarios, to define the scope consists of: please select all that apply

A) Setting the time frame.
B) Identifying the major stakeholders.
C) Setting the scope of analysis.
D) Identifying key uncertainties.

Question 19

Scenario planning is a useful tool for predicting the future.

Question 20

Each scenario describes an equilibrium state that can exist forever.

Question 21

A PESTLE analysis is used to analyse:

A) The macro-environment.
B) Internal resources.
C) Industry structure.
D) Strategic groups.

Question 22

Consumers are less tolerant of poor quality than they used to be. This is an example of:

A) A macro-environmental issue
B) A value-chain issue.
C) An economic issue.
D) A knowledge management issue.

Question 23

In the PESTLE analysis, key economic indicators could include: Please select all that apply.

A) Interest rates.
B) Population statistics.
C) Unemployment rates.
D) European Union legislation.

Question 24

Firms need to be scanning their ________ for sign of change in government policy which may impact their industry.

Question 25

An economic indicator can never provide an explanation for a complete economic phenomenon.

Question 26

The changes in economic activity manifest themselves through changes in: Please select all that apply.

A) Exchange rate.
B) Unemployment rates.
C) Disposable income.
D) Tax rate.

Question 27

The sign of depreciation in exchange rate will mostly affect: Please select all that apply.

A) Manufacturing organizations.
B) Construction industry.
C) International trade.
D) All industries.

Question 28

Retail organizations in Europe and the US have responded to the aging society by employing older personnel. This change in businesses is due to: Please select all that apply.

A) Legal factors.
B) Economic factors.
C) Political factors.
D) Social factors.

Question 29

The increasing use of the internet to buy goods is which type of PESTLE issue? Please select all that apply.

A) Social
B) Economic
C) Political
D) Technological

Question 30

SWOT analysis may be used in both the macro-environment and at the industry level