Question 1

A high threat of new entrants keeps pricing pressures on existing firms, keeping consumers happy and making the industry attractive and profitable.

Accepted Answer

The answer of A high threat of new entrants keeps...

Question 2

Early adopters of new technology often achieve higher market shares and higher returns than later adopters of the technology.

Accepted Answer

Early adopters often have a first-mover advantage and can establish themselves as leaders in the market before competition increases. They also have more time to perfect their use and understanding of the technology, which can result in higher returns.

Question 3

Switching costs, access to distribution channels, economies of scale, large numbers of competing firms, and slow industry growth are some of the entry barriers that may affect the threat of new entrants to an industry.

Accepted Answer

The answer of Switching costs, access to distribution channels, economies...

Question 4

The Chapter 2 Strategic Focus indicates that producing and selling "green" (i.e., environmentally friendly) products is one way that companies have responded to pressures from the physical environment.

Accepted Answer

The Chapter 2 Strategic Focus section states that producing and selling "green" products is a response to pressures from the physical environment, indicating that this statement is true.

Question 5

Global warming and energy consumption are aspects of the technological environment segment that firms should monitor.

Accepted Answer

The answer of Global warming and energy consumption are aspects...

Question 6

The five forces model expands the arena of competitive analysis beyond direct competitors (i.e., rivals) to include buyers and suppliers who may also be a source of competition.

Accepted Answer

The five forces model considers not only direct competitors, but also the bargaining power of buyers and suppliers as potential sources of competition.

Question 7

PepsiCo's strategy called "capital performance with a purpose" links green efforts in ll businesses to the bottom line. This is an example of addressing concerns in the physical segment of the general environment.

Accepted Answer

The strategy of linking green efforts to the bottom line addresses concerns in the physical segment of the general environment, which includes factors such as natural resources, climate change, and sustainability.

Question 8

Contrary to popular belief, the global segment of the external environment does not provide many opportunities for firms such as H.J. Heinz, SAB Miller, and Citigroup, all of which recently experienced low growth and profits coming from emerging markets.

Accepted Answer

The statement is contradicted by the example given of H.J. Heinz and SAB Miller, which both experienced significant growth and profits from emerging markets before being acquired by larger companies. While Citigroup may have had challenges in certain emerging markets, it is not necessarily true that the global segment of the external environment does not provide opportunities for all firms.

Question 9

Compared with the general environment, the industry environment has a more indirect effect on the firm's strategic competitiveness and ability to earn above-average returns.

Accepted Answer

The industry environment has a direct effect on the firm's strategic competitiveness and ability to earn above-average returns. It includes factors such as suppliers, competitors, customers, and potential new entrants that directly impact the firm's performance.

Question 10

The Chapter 2 Strategic Focus notes that McDonald's has pursued green restaurant design, sustainable packaging, waste management, and energy efficiency all of which are aspects of the technological segment of the general environment.

Accepted Answer

The answer of The Chapter 2 Strategic Focus notes that...

Question 11

An example of a government policy barrier to entry would be where the Antitrust Division of the Department of Justice disallows a merger because it creates a firm that is too dominant and would thus create unfair competition.

Accepted Answer

This statement accurately describes a government policy barrier to entry. The Antitrust Division of the Department of Justice is responsible for preventing monopolies and promoting fair competition in the market. If they determine that a merger would create a dominant firm that could harm competition, they may disallow it as a barrier to entry for other firms trying to enter the market.

Question 12

The technological segment includes the institutions and activities involved with creating new knowledge and translating that knowledge into new outputs, products, processes, and materials.

Accepted Answer

The statement accurately describes the technological segment.

Question 13

It is uncommon for a large firm to receive a majority of revenues from outside its home country.

Accepted Answer

It is not uncommon for large firms to have significant revenue streams from outside their home country, as globalization and international trade have become increasingly commonplace in the business world. Many large companies have expanded into foreign markets and established a global customer base to increase revenue and enhance their competitiveness.

Question 14

Although health care reform legislation was passed in the early part of the Obama administration, it continues to be a bone of contention especially since the 2010 midterm election and attempts have been made to repeal it in many states. These attitudes about health care reform make up the sociocultural segment of the general environment.

Accepted Answer

The statement accurately describes how attitudes about health care reform make up the sociocultural segment of the general environment.

Question 15

The Chapter 2 Strategic Focus on efforts by firms to address the physical environment indicated that producing and selling "green" (environmentally friendly) products was not a successful strategy.

Accepted Answer

The answer of The Chapter 2 Strategic Focus on efforts...

Question 16

According to the Chapter 2 Strategic Focus, in response to hard economic conditions, there is declining trend among many companies to reduce their impact on the physical environment.

Accepted Answer

The statement is incorrect. In response to hard economic conditions, many companies actually increase their focus on sustainability and reducing their impact on the environment as a strategy to cut costs and differentiate themselves in the market.

Question 17

Producing and selling "green" (environmentally friendly) products is one way that companies have responded to pressures from the physical environment (Chapter 2 Strategic Focus).

Accepted Answer

Companies have responded to pressures from the physical environment by producing and selling "green" products, which are environmentally friendly.

Question 18

Globalfocusing is often used by firms with high levels of international operations who further increase their internationalization by focusing on global niche markets.

Accepted Answer

The answer of Globalfocusing is often used by firms with...

Question 19

Developing a political strategy by the newly formed General Motors would likely be ineffective as firms are generally unable to influence the political/legal environment.

Accepted Answer

While it is true that firms cannot have direct control over the political/legal environment, they can engage in political activities such as lobbying, campaign contributions, and advocacy to influence government decision-making. Therefore, developing a political strategy can be effective in shaping the regulatory environment to be more favorable for the firm's operations.

Question 20

According to a recent study reported in the Wall Street Journal, 95% of consumer products examined committed at least one offense of "green washing," a term used to describe unproven environmental claims (Chapter 2 Strategic Focus).

Accepted Answer

According to the statement, the recent study reported in the Wall Street Journal found that 95% of consumer products examined committed at least one offense of "green washing," which implies that the statement is true.

Quiz 2: The External Environment: Opportunities, Threats, Competition, and Competitor Analysis