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

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Question 21

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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.

A) True
B) False

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Question 22

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Customer loyalty programs such as airline frequent flyer miles are an attempt to

A) decrease competitors' access to distribution channels.
B) develop a cost advantage independent of scale.
C) increase customers' switching costs.
D) overcome the perishability of the hotel "product."

E) All of the above
F) A) and D)

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Question 23

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The objective of assessing the external environment is to determine the timing and importance of the effects of environmental changes and trends on the strategic management of the firm.

Which of the following would NOT be identified in an analysis of the economic portion of the general environment?

Blood banks are highly dependent on donors. In the terminology of industry analysis, which statement of donors is accurate?

Case Scenario : 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're most 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. -(Refer to the above Case Scenario ) How are the various facets of the general environment (Table 2.1 in Strategic Management) likely to be important for BGC?

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 GoMRO sourcing center for indirect spot buys locates products through its database of 8,000 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. -(Refer to the above Case Scenario) What opportunities does the Internet provide to Mangler, both domestically and internationally?

An analysis of society's attitudes and values would be conducted when studying the ____ segment of the general environment.

The competitor analysis is the final part of the external environment analysis and focuses on each company against which a firm directly competes (e.g., Coca-Cola and PepsiCo, Home Depot and Lowe's, and Airbus and Boeing).

Case Scenario : 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 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). -(Refer to the above Case Scenario) Given the characteristics of buyers (customers) in the U.S. home furnishings manufacturing industry (many products to choose from, few home furnishing products have strong brands, and customers can easily switch among high and low-priced furniture), buyers would be considered weak and their effect would be to make the industry more atrractive.

Describe the factors that raise the competitive nature of an industry's rivalry.

The aircraft industry has long been dominated by two large aircraft manufacturers, Boeing and Airbus. The demand for major aircraft is low, and Boeing and Airbus aggressively compete for orders from airlines. What effect will these conditions have on the domestic airline industry?

The economic environment refers to

Competitor analysis focuses on

Any competitor intelligence practice that is legal is also ethical.

Mighty Green, a residential lawn chemical manufacturer, is committed to gaining market share in its industry. Mighty Green

In the chapter discussion of the political legal segment of the general environment, it was noted that President Obama's administration has sought to pursue policies that would

Analyzing income distribution would include all of the following EXCEPT

Which of the following represents a competitive intelligence practice that is both legal and ethical?

A firm experiencing intense rivalry with powerful competitors should energetically engage in competitor analysis.