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Exam 2: Analyzing the External Environment of the Firm: Creating Competitive Advantages

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Question 41

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Perceptual acuity, according to Ram Charan, is the ability to know for certain what will happen in the future.

A) True
B) False

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Question 42

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Which of the following would be considered part of the general environment of a firm?

A) decreased entry barriers
B) higher unemployment rates
C) increased bargaining power of the firm's suppliers
D) increased competitive intensity

E) A) and C)
F) None of the above

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Question 43

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Supplier power tends to be highest in industries where products are vital to buyers, where switching from one supplier to another is very costly, and where there are many suppliers.

Scenario planning is usually concerned with short-term forecasts.

The strategic groups concept is valuable for assessing the implications of industry ________ for the strategic group as a whole.

In general, the threat of substitutes is heightened because the Internet

Because the Internet lowers barriers to entry in most industries, it

PPG Industries has developed four alternative futures based on differing assumptions about two key variables: the cost of energy and the extent of opportunity for growth in emerging markets. This is called demand monitoring.

A demographic trend in the United States, the aging of the population, has important implications for the economic segment (in terms of tax policies to provide benefits to increasing numbers of older citizens).

The bargaining power of suppliers is enhanced under the following market condition:

All of the following are important elements of the political and legal segment of the general environment except

One CEO gets together with his critical people for half a day every eight weeks to discuss what's new and what's going on in the world. The setting is informal, and outsiders often attend. This is an example of how not to improve perceptual acuity.

Emerging sociocultural changes in the environment include

Two companies ask outsiders to critique strategy during their board's strategy sessions. Such input typically leads to spirited discussions that provide valued input on the hinge assumptions and options that are under consideration. This is an example of how to improve perceptual acuity.

The strategic groups concept is valuable for charting the ______ directions of firm strategies.

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 major sociocultural trend in the United States is the increased educational attainment by women.

The concept of strategic groups is also important to the external environment of a firm.

The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration.

The strategic groups concept is valuable for identifying groups with _______ competitive positions.