Chapter 004- Strategic Management and Business Policy: Globalization, Innovation and Sustainablility 14 edition Test bank PDF

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Chapter004- Environmental scanning is the monitoring, evaluating, and disseminating of information from the external environment to key people within the corporation. *A) TrueB) False Chapter004- A corporation uses environmental scanning to avoid strategic surprise. *A) TrueB) False Chapter004- Poli...

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1. Chapter004-01 Environmental scanning is the monitoring, evaluating, and disseminating of information from the external environment to key people within the corporation. *A) True B) False

2. Chapter004-02 A corporation uses environmental scanning to avoid strategic surprise. *A) True B) False

3. Chapter004-03 Political-legal forces regulate the values, mores, and customs of society. A) True *B) False

4. Chapter004-04 The societal environment includes the economic, technological, political-legal, and sociocultural forces. *A) True B) False

5. Chapter004-05 Industry analysis was popularized by Michael Porter. *A) True B) False

6. Chapter004-06 In dynamic environments, the CEO's focus is on forces in the societal environment. A) True *B) False

7. Chapter004-07 Today's organizations must scan the natural environment for factors that might previously have been taken for granted. *A) True B) False

8. Chapter004-08 The transferring of profits from a foreign subsidiary to a corporation's headquarters is known as repatriation of profits. *A) True B) False

9. Chapter004-09 An example of an economic variable in the societal environment is interest rates. *A) True B) False

10. Chapter004-10 The growing health consciousness is an example of a political-legal force. A) True *B) False

11. Chapter004-11 One of the demographic variables in the societal environment is the changing household composition. *A) True B) False

12. Chapter004-12 One of the breakthrough developments in technology is the portable information device and electronic networking. *A) True B) False

13. Chapter004-13 A multinational corporation is a company with significant assets and activities in multiple countries. *A) True B) False

14. Chapter004-14 The origin of competitive advantage lies in the ability to identify and respond to environmental change well in advance of competition. *A) True B) False

15. Chapter004-15 Strategic myopia is the willingness to reject unfamiliar as well as negative information. *A) True B) False

16. Chapter004-16 Booz & Company found that companies that are most successful at avoiding surprises had a well-defined system that integrated planning, budgeting, and business reviews. *A) True B) False

17. Chapter004-17 An industry is a group of firms producing a similar product or service. *A) True B) False

18. Chapter004-18 According to Michael Porter, the weaker each of the competitive forces, the more limited companies are in their ability to raise prices and earn greater profits. A) True *B) False

19. Chapter004-19 According to Michael Porter, a high force can be regarded as a threat because it is likely to reduce profits. *A) True B) False

20. Chapter004-20 An entry barrier is an obstruction that makes it difficult for a company to enter an industry. *A) True B) False

21. Chapter004-21 One of the possible barriers to entry is product differentiation. *A) True B) False

22. Chapter004-22 The need to invest huge financial resources in manufacturing facilities in order to produce large

commercial airplanes creates a significant barrier to entry to any competitor for Boeing and Airbus. *A) True B) False

23. Chapter004-23 Governments can do little to erect barriers to entry in an industry. A) True *B) False

24. Chapter004-24 NutraSweet can serve as a product substitute for sugar satisfying the same need. *A) True B) False

25. Chapter004-25 A buyer may be powerful when changing suppliers costs a great deal. A) True *B) False

26. Chapter004-26 A fragmented industry is dominated by a few large firms, each of which struggles to differentiate its products from the competition. A) True *B) False

27. Chapter004-27 Multidomestic industries are specific to each country or group of countries. *A) True B) False

28. Chapter004-28 The only factor used to determine whether an industry will be primarily multidomestic or primarily global is the pressure for local responsiveness. A) True *B) False

29. Chapter004-29 McDonald's and Olive Garden are in the same strategic group.

A) True *B) False

30. Chapter004-30 According to Miles and Snow, reactors are companies with a limited product line that focus on improving the efficiency of their existing operations. A) True *B) False

31. Chapter004-31 In hypercompetitive industries, competitive advantage comes from an up-to-date knowledge of environmental trends and competitive activity coupled with a willingness to risk a current advantage for a possible new advantage. *A) True B) False

32. Chapter004-32 Key success factors seldom vary from industry to industry. A) True *B) False

33. Chapter004-33 An industry matrix summarizes the key success factors within a particular industry. *A) True B) False

34. Chapter004-34 Competitive intelligence is a formal program of gathering information on a company's competitors. *A) True B) False

35. Chapter004-35 Business intelligence is one of the fastest growing fields within strategic management. *A) True B) False

36. Chapter004-36 A.C. Nielsen is an example of an outside organization providing a firm with competitive intelligence.

*A) True B) False

37. Chapter004-37 To combat the increasing theft of company secrets, the U.S. government passed the Economic Espionage Act in 1996. *A) True B) False

38. Chapter004-38 Faulty underlying assumptions are the most frequent cause of forecasting errors. *A) True B) False

39. Chapter004-39 Extrapolation rests on the assumption that the world is relatively dynamic and changes quickly in the short run. A) True *B) False

40. Chapter004-40 Statistical modeling is a quantitative forecasting technique that attempts to discover causal or at least explanatory factors that link two or more time series together. *A) True B) False

41. Chapter004-41 An industry scenario is a forecasted description of a particular industry's likely future. It is developed by analyzing the probable impact of future societal forces on key groups in a particular industry. *A) True B) False

42. Chapter004-42 The combination of the degree of complexity and the degree of change existing in an organization's external environment is/are called A) strategic factors. B) strategic issues. *C) environmental uncertainty. D) strategic fit. E) scenarios.

43. Chapter004-43 According to the text, one reason environmental uncertainty is a threat to strategic managers is because A) it is a costly and time-consuming process. B) it creates a new playing field in which creativity and innovation can play a major part in strategic decisions. C) it forces the strategic manager to be more stable. *D) it hampers their ability to develop long-range plans. E) there are too many uncontrollable variables.

44. Chapter004-44 Which of the following is NOT descriptive of external environmental scanning? A) used as a tool to ensure a corporation's long-term health B) used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy *C) used to identify major stockholders D) used as a tool for corporations to avoid strategic surprise E) used to determine a firm's competitive advantage

45. Chapter004-45 The corporation's task environment A) encompasses the physical working areas of the organization. *B) includes those elements or groups within an organization's industry. C) is an advisory committee to top management. D) is an accounting of the many jobs within an organization. E) is the job requirement specification listing necessary skills and abilities.

46. Chapter004-46 Which of the following is NOT an element of the organization's task environment? A) local communities B) trade associations C) governments *D) technological developments E) special interest groups

47. Chapter004-47 Which environment was generally perceived by business people to be something to exploit, not conserve until the twentieth century? A) the task environment *B) the natural environment C) the internal environment D) the societal environment E) the external environment

48. Chapter004-48 Which of the following is NOT a major force in the societal environment? A) political-legal forces *B) labor forces C) economic forces D) technological forces E) sociocultural forces

49. Chapter004-49 All of the following are technological breakthroughs already having a significant impact on many industries EXCEPT *A) growing health consciousness. B) alternative energy sources. C) genetically altered organisms. D) smart, mobile robots. E) virtual personal assistants.

50. Chapter004-50 Which societal force includes demographic trends? A) political-legal forces B) labor forces C) economic forces D) technological forces *E) sociocultural forces

51. Chapter004-51 Which of the following is NOT one of the eight current sociocultural trends mentioned in the text? A) increasing environmental awareness B) growth of the seniors market C) decline of the mass market *D) increasing food consumption E) impact of Generation Y boomlet

52. Chapter004-52 Which is the largest of the current U.S. generations? *A) Baby Boomers B) Woofies C) Silent Generation D) Gen X E) Gen Y

53. Chapter004-53 A company with significant assets and activities in multiple countries is known as a(n) *A) multinational corporation. B) repatriated corporation. C) transferable corporation. D) duplicate corporation. E) emancipated corporation.

54. Chapter004-54 When strategic managers have a willingness to reject unfamiliar as well as negative information it is referred to as A) strategic paralysis. B) corporate inertia. C) management indifference. *D) strategic myopia. E) corporate apathy.

55. Chapter004-55 The origin of competitive advantage lies in the ability to A) gain major stockholders. *B) identify and respond to environmental change well in advance of competition. C) launch products quickly. D) serve customers faster. E) create surprise for others.

56. Chapter004-56 According to Porter, seeing clothing firms such as Under Armour enter the athletic shoe industry would reflect a *A) medium bargaining power of suppliers. B) low threat of substitutes. C) medium bargaining power of buyers. D) high threat of potential entrants. E) low competitive intensity.

57. Chapter004-57 Industry analysis is primarily concerned with a corporation's A) societal environment. *B) task environment. C) sociocultural environment. D) economic environment. E) internal environment.

58. Chapter004-58 According to Porter, the corporation is most concerned with

*A) the intensity of competition within its industry. B) the aggregate level of demand for a product line. C) a market's position on its life cycle. D) the amount of pressure from the societal environment. E) the level of government action in an industry.

59. Chapter004-59 In addition to Porter's Five Forces, another force added in the text is A) bargaining power of unions. *B) other stakeholders. C) threat of prospects. D) threat of shareholders. E) bargaining strength of employees.

60. Chapter004-60 According to Porter, the collective strength of the interaction of potential entrants, buyers, substitutes, suppliers, firm rivalry, and other stakeholders determine A) the level of government action in an industry. B) the probable industry attractiveness and business strength position. *C) the ultimate profit potential in the industry measured in terms of long-run return on invested capital. D) the aggregate level of demand for a product line. E) the amount of pressure from the societal environment.

61. Chapter004-61 According to Porter's model, a strong or high force is likely to reduce profits and can be regarded as a(n) A) benefit. B) opportunity. C) advantage. *D) threat. E) risk.

62. Chapter004-62 According to Porter's model, a low force can enable the company to earn greater profits and can be regarded as a(n) A) benefit. *B) opportunity. C) advantage. D) threat. E) risk.

63. Chapter004-63 Which of the following is NOT descriptive of the "threat of new entrants"?

A) depends on the presence of entry barriers B) have a desire to gain market share C) depends on the reaction of existing competitors *D) does not impact industry attractiveness E) brings new capacity and substantial resources

64. Chapter004-64 Which barrier to entry do corporations such as P&G use to force new entrants to spend heavily to overcome existing customer loyalty? A) rivalry among existing firms B) switching costs C) capital requirements *D) product differentiation E) access to distribution channels

65. Chapter004-65 Which barrier to entry uses cost advantages associated with large size? A) rivalry among existing firms B) switching costs C) cost disadvantages independent of size D) capital requirements *E) economies of scale

66. Chapter004-66 Which barrier to entry is demonstrated by Microsoft's MS-DOS operating system? A) government policy B) access to distribution channels *C) cost disadvantages independent of size D) capital requirements E) economies of scale

67. Chapter004-67 Intel was able to gain a significant cost advantage over its competitors in the production and sale of microprocessors because of A) capital requirements. B) product differentiation. C) switching costs. *D) economies of scale. E) access to distribution.

68. Chapter004-68 Which of the following is NOT descriptive of intense rivalry among firms?

A) slow industry growth B) high fixed costs C) high exit barriers D) few competitors or competitors that are roughly equal in size and power *E) product offerings that are highly differentiated

69. Chapter004-69 Which of the following is NOT descriptive of the threat of substitute products or services? A) Substitute products appear to be different, but satisfy the same need as another product. B) If the cost of switching is low, substitutes may have a strong effect on an industry. *C) Identifying substitutes is relatively easy since they look similar. D) Possible substitute products or services may not appear to be easily substitutable. E) Substitutes limit the potential returns of an industry.

70. Chapter004-70 A sugar company that is worried that consumers may buy artificial sweetener instead of sugar is concerned about the A) threat of new entrants. B) rivalry among existing firms. *C) threat of substitute products. D) bargaining power of suppliers. E) bargaining power of buyers.

71. Chapter004-71 Which of the following is NOT descriptive of a high level of bargaining powers of buyers? A) Changing suppliers costs very little. B) Alternative suppliers are plentiful because of standardization of the product. C) The purchased product represents a high percentage of buyer's costs. D) The buyer buys a large proportion of the seller's product or service. *E) A buyer earns high profits and is very insensitive to costs and service differences.

72. Chapter004-72 When General Motors considers making its own automotive parts, Delphi Automotive Supply Company would be concerned with the A) bargaining power of suppliers. *B) bargaining power of buyers. C) rivalry among existing competitors. D) threat of substitutes. E) threat of new entrants.

73. Chapter004-73 Which of the following is NOT descriptive of a high level of bargaining power of suppliers? *A) Substitutes are readily available. B) The product or service is unique.

C) The supplier industry is dominated by a few companies, but sells too many. D) The purchasing industry buys only a small portion of the supplier group's goods and services. E) Suppliers are able to integrate forward and compete directly with their present customers.

74. Chapter004-74 Other software companies could not compete with Microsoft based on the hesitation of consumers to try a new software. Which of Porter's forces does this reflect? A) exit barriers B) bargaining power of buyers C) threat of substitutes *D) bargaining power of suppliers E) rivalry among existing firms

75. Chapter004-75 A company or an industry whose product works well with a firm's product and without which the product would lose much of its value is considered to be a(n) *A) complementor. B) oligopoly. C) strategic group. D) industry leader. E) staggered company.

76. Chapter004-76 A relationship that illustrates the term "complementor" is *A) Microsoft and Intel. B) General Motors and Ford. C) Hewlett Packard and Compaq. D) Gateway and Dell. E) America Online and CompuServe.

77. Chapter004-77 The strength of each of the six driving forces of industry competition varies according to the A) effectiveness of the strategic planning. *B) stage of industry evolution. C) capital requirements. D) changes in the political environment. E) amount of government regulation.

78. Chapter004-78 In a fragmented industry A) no firm has large market share. B) prices drop as new competitors enter the market. C) economies of scale are used to reduce costs. D) companies integrate to further reduce costs.

*E) All of these

79. Chapter004-79 The U.S. major home appliance industry is an example of an industry A) that has evolved from an oligopoly to a monopoly. B) in which each company maintained a distinct product line. *C) that was once fragmented, but now is consolidated. D) that has experienced consistent, increasing sales. E) experiencing a successful strategy of product specialization because of product differentiation.

80. Chapter004-80 An industry dominated by a few large firms, all of which struggle with product differentiation, is known as A) multidomestic. *B) consolidated. C) global. D) indigenous. E) worldwide.

81. Chapter004-81 In which type of international industry do corporations tailor their products to the specific needs of consumers in a particular country? A) consortium industry B) global industry C) indigenous industry *D) multidomestic industry E) worldwide industry

82. Chapter004-82 Which type of international industry manufactures and sells the same products with only minor adjustments made for individual countries around the world? A) consortium industry *B) global industry C) indigenous industry D) multidomestic industry E) worldwide industry

83. Chapter004-83 Which of the following is an example of a global industry? A) retailing B) banking *C) tires D) insurance E) health care

84. Chapter004-84 The two factors that tend to determine whether an industry will be primarily multidomestic or primarily global are (1) the pressure for coordination within the MNCs operating in that industry and (2) *A) the pressure for local responsiveness on the part of individual country markets. B) the power of the local country governments to restrict MNC actions. C) the need for brand management in the various MNCs operating within that industry. D) the importance of differentiating with integrating mechanisms in regional cooperatives. E) the likelihood of terrorist activity impacting that industry.

85. Chapter004-85 When the pressure for coordination is strong and the pressure for local responsiveness is weak for multinational corporations within a particular industry, the industry will tend to become *A) global. B) consolidated. C) multidomestic. D) risky. E) indigenous.

86. Chapter004-86 When the pressure for local responsiveness is strong and the pressure for coordination is weak for multinational corporations in an industry, the industry will tend to become A) global. B) consolidated. *C) multidomestic. D) risky. E...