Taking advantage of the increasing penetration of personal computers in American homes, the Mayo Clinic transformed itself as a provider of health-related knowledge and expertise. It took advantage of the ______ trends of the _______ in the prices of PCs and the ____________ presence of PCs in virtually every home in the U.S.

45.

Two of the key inputs to developing forecasts discussed in the text are:    A.  environmental scanning and stakeholder identification. B.  environmental scanning and competitor intelligence. C.  assessing internal strengths and environmental scanning. D.  environmental scanning and a SWOT analysis. Three important processes (scanning, monitoring, and gathering competitive intelligence) are used to develop forecasts.

AACSB: Analytic Blooms: Remember Learning Objective: 02-01 The importance of developing forecasts of the business environment. Level of Difficulty: 1 Easy Topic: Creating the Environmentally Aware Organization

46.

_____________ tracks the evolution of environmental trends, sequences of events, or streams of activities.    A.  Environmental scanning B.  Environmental monitoring C.  Environmental surveying D.  Competitive intelligence Environmental monitoring tracks the evolution of environmental trends, sequences of events, or streams of activities. Monitoring enables firms to evaluate how dramatically environmental trends are changing the competitive landscape.

AACSB: Analytic Blooms: Remember Learning Objective: 02-02 Why environmental scanning; environmental monitoring; and collecting competitive intelligence are critical inputs to forecasting. Level of Difficulty: 1 Easy Topic: Creating the Environmentally Aware Organization

47.

Taking advantage of the increasing penetration of personal computers in American homes, the Mayo Clinic transformed itself as a provider of health-related knowledge and expertise. It took advantage of the ______ trends of the _______ in the prices of PCs and the ____________ presence of PCs in virtually every home in the U.S.    A.  soft; increase; increasing B.  soft; decrease; decreasing C.  hard; decrease; decreasing D.  hard; decrease; increasing A hard trend is a projection based on measurable facts, events, or objects. It is something that will happen. The aging of the population is a hard trend. So is the increasing speed and decreasing cost of computers.

AACSB: Analytic Blooms: Understand Learning Objective: 02-02 Why environmental scanning; environmental monitoring; and collecting competitive intelligence are critical inputs to forecasting. Level of Difficulty: 2 Medium Topic: Creating the Environmentally Aware Organization

48.

Scanning the general environment would identify information on _______________.    A.  substitute goods B.  the aging population and ethnic shifts C.  customer and firm bargaining power D.  competitive rivalry Environmental scanning involves surveillance of the external environment of a firm to predict environmental changes and detect changes already under way. This alerts the organization to critical trends and events before changes develop a discernible pattern and before competitors recognize them.

AACSB: Analytic Blooms: Remember Learning Objective: 02-02 Why environmental scanning; environmental monitoring; and collecting competitive intelligence are critical inputs to forecasting. Level of Difficulty: 1 Easy Topic: Creating the Environmentally Aware Organization

49.

Which of the following is not an example of corporate competitive analysis?    A.  Banks tracking home loans B.  Airlines changing hundreds of fares daily in response to competitor tactics C.  Car manufacturers offering sales incentives based on rival offers D.  Consumers comparing product offers online Corporate competitive intelligence is the activity of collecting and interpreting data on competitors, defining and understanding the industry, and identifying competitor strengths and weaknesses in order to avoid surprises by anticipating competitor moves and decreasing response time.

AACSB: Analytic Blooms: Remember Learning Objective: 02-02 Why environmental scanning; environmental monitoring; and collecting competitive intelligence are critical inputs to forecasting. Level of Difficulty: 1 Easy Topic: Creating the Environmentally Aware Organization

50.

Gathering competitive intelligence ___________.    A.  is good business practice B.  is illegal C.  is considered unethical D.  minimizes the need to obtain information in the public domain Competitive intelligence (CI) helps firms define and understand their industry and identify strengths and weaknesses of rivals. This includes the intelligence gathering associated with collecting data on competitors and interpreting such data.

AACSB: Analytic Blooms: Understand Learning Objective: 02-02 Why environmental scanning; environmental monitoring; and collecting competitive intelligence are critical inputs to forecasting. Level of Difficulty: 2 Medium Topic: Creating the Environmentally Aware Organization

51.

Environmental forecasting does not involve plausible projections about the ________ of environmental change.    A.  direction B.  scope C.  speed D.  lack of intensity Environmental forecasting involves the development of plausible projections about the direction, scope, speed, and intensity of environmental change. Its purpose is to predict change.

AACSB: Analytic Blooms: Remember Learning Objective: 02-02 Why environmental scanning; environmental monitoring; and collecting competitive intelligence are critical inputs to forecasting. Level of Difficulty: 1 Easy Topic: Creating the Environmentally Aware Organization

52.

A danger of forecasting discussed in the text is that _____________.    A.  in most cases, the expense of collecting the necessary data exceeds the benefit B.  the retrospective nature of forecasting provides little information about the future C.  managers may view uncertainty as black and white while ignoring important gray areas D.  it can create legal problems for the firm if regulators discover the company is making forecasts A danger of forecasting is that managers may view uncertainty as black and white and ignore important gray areas. The problem is that underestimating uncertainty can lead to strategies that neither defend against threats nor take advantage of opportunities.

AACSB: Analytic Blooms: Understand Learning Objective: 02-03 Why scenario planning is a useful technique for firms competing in industries characterized by unpredictability and change. Level of Difficulty: 2 Medium Topic: Creating the Environmentally Aware Organization

53.

PPG Industries, the Pittsburgh-based manufacturer of paints, coatings, optical products, specialty materials, chemicals, glass, and fiber glass suffered serious failures in 1986 and 1987 when it attempted to diversify its offers. It used a technique to help it identify possible future strategies. What was it?    A.  crowdsourcing B.  scenario analysis C.  competitive intelligence D.  monitoring Scenario analysis is a more in-depth approach to forecasting. It draws on a range of disciplines and interests, among them economics, psychology, sociology, and demographics. It usually begins with a discussion of participant thoughts on ways in which societal trends, economics, politics, and technology may affect an issue. Developing strategies based on possible future scenarios seems to be paying off for PPG Industries. The company currently boasts a return on equity of 19.1 percent and its stock has had a total return of over 43 percent over the most recent 52-week period.

AACSB: Analytic Blooms: Understand Learning Objective: 02-03 Why scenario planning is a useful technique for firms competing in industries characterized by unpredictability and change. Level of Difficulty: 2 Medium Topic: Creating the Environmentally Aware Organization

54.

SWOT analysis is a framework for analyzing the internal and external environment of a company. It consists of strengths, weaknesses, opportunities, and threats. According to a SWOT analysis, which of the following is not an aspect that the strategy of the firm must follow?    A.  build on its weaknesses B.  remedy the weaknesses or work around them C.  take advantage of the opportunities presented by the environment D.  protect the firm from the threats The general idea of SWOT analysis is that a firm's strategy must build on its strengths, remedy its weaknesses or work around them, take advantage of the opportunities presented by the environment, and protect the firm from the threats. Despite its apparent simplicity, the SWOT approach has been very popular. First, it forces managers to consider both internal and external factors simultaneously. Second, its emphasis on identifying opportunities and threats makes firms act proactively rather than reactively. Third, it raises awareness about the role of strategy in creating a match between the environmental conditions and the firm's internal strengths and weaknesses. Finally, its conceptual simplicity is achieved without sacrificing analytical rigor.

AACSB: Analytic Blooms: Understand Learning Objective: 02-03 Why scenario planning is a useful technique for firms competing in industries characterized by unpredictability and change. Level of Difficulty: 2 Medium Topic: Creating the Environmentally Aware Organization

55.

The aging of the population, changes in ethnic composition, and effects of the baby boom are ____.    A.  macroeconomic changes B.  demographic changes C.  global changes D.  sociocultural changes Demographics are genetic and observable characteristics of a population, including elements such as the aging population, rising or declining affluence, changes in ethnic composition, geographic distribution of the population, and disparities in income level.

AACSB: Analytic Blooms: Remember Learning Objective: 02-04 The impact of the general environment on a firm's strategies and performance. Level of Difficulty: 1 Easy Topic: The General Environment

56.

Larger numbers of women entering the work force since the early 1970s is an example of ______.    A.  demographic changes B.  political and legal environmental changes C.  sociocultural changes D.  technological developments Sociocultural forces influence the values, beliefs, and lifestyles of a society. Examples include a higher percentage of women in the workforce.

AACSB: Analytic Blooms: Understand Learning Objective: 02-04 The impact of the general environment on a firm's strategies and performance. Level of Difficulty: 2 Medium Topic: The General Environment

57.

Emerging sociocultural changes in the environment include ____________.    A.  changes in the ethnic composition B.  the increasing educational attainment of women in the past decade C.  progressively less disposable income by consumers D.  changes in the geographic distribution of the population Sociocultural forces influence the values, beliefs, and lifestyles of a society. Examples include an increased educational attainment by women in the workplace.

AACSB: Analytic Blooms: Understand Learning Objective: 02-04 The impact of the general environment on a firm's strategies and performance. Level of Difficulty: 2 Medium Topic: The General Environment

58.

All of the following are important elements of the political/legal segment of the general environment EXCEPT:    A.  the deregulation of utilities B.  the Americans with Disabilities Act (ADA) C.  the increased use of Internet technology D.  increases in the federally mandated minimum wage Political processes and legislation influence environmental regulations with which industries must comply. Some elements of the political/legal arena include the Americans with Disabilities Act (ADA) of 1990, deregulation of utilities, and increases in the federally mandated minimum wage.

AACSB: Analytic Blooms: Understand Learning Objective: 02-04 The impact of the general environment on a firm's strategies and performance. Level of Difficulty: 2 Medium Topic: The General Environment

59.

Which of the following would be considered part of a firm's general environment?    A.  decreased entry barriers B.  higher unemployment rates C.  increased bargaining power of the firm's suppliers D.  increased competitive intensity The general environment is divided into six segments: demographic, sociocultural, political/legal, technological, economic, and global.

AACSB: Analytic Blooms: Understand Learning Objective: 02-04 The impact of the general environment on a firm's strategies and performance. Level of Difficulty: 2 Medium Topic: The General Environment

60.

Interest-rate increases have a __________ impact on the residential home construction industry and a __________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items.    A.  positive; negligible B.  negative; negligible C.  negative; positive D.  positive; negative Interest-rate increases have a negative impact on the residential home construction industry but a negligible (or neutral) effect on industries that produce consumer necessities such as prescription drugs or common grocery items.

AACSB: Analytic Blooms: Understand Learning Objective: 02-04 The impact of the general environment on a firm's strategies and performance. Level of Difficulty: 2 Medium Topic: The General Environment