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

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Question 61

Multiple Choice

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Exit barriers to a firm include all of the following EXCEPT

A) generic assets.
B) loyalty to employees.
C) governmental concern about job loss.
D) restrictive labor agreements.

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Question 62

Multiple Choice

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The large expenditures on advertising by firms such as Procter & Gamble and Colgate-Palmolive is an example of what kind of barrier to entry?

A) Access to distribution channels.
B) Capital requirements.
C) Economies of scale.
D) Product differentiation.

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Question 63

Multiple Choice

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

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) Using the five-forces framework, summarize the opportunities and threats facing Barracuda as it considers entry into the home furnishings manufacturing industry. Which threats are greatest to current incumbents?

The recent bankruptcy filings by General Motors and Chrysler Corporation illustrate that firms cannot directly control the general environment's segments.

Economies of scale refer to the fact that as the

What is a firm's strategic group? What effect does the strategic group have on the firm?

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.

Analyzing income distribution would include all of the following EXCEPT

Strategic groups are firms in different industries following the same or similar strategies.

Once a firm has determined its competitor's future objectives, current strategy, assumptions, and strengths and weaknesses, its next step is to develop

Describe and discuss the four activities of the external environmental analysis process.

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) Why would attention focused on victims of natural disasters be a threat to the BGC?

In analyzing the demographic segment of the general environment, one typically examines all of the following factors EXCEPT

New entrants to an industry are more likely when

Because of threats and risks in the global environment, some firms choose to take a more cautious approach by

The political/legal segment of an environment represents

Demographic, economic, political/legal, sociocultural, technological, global, and physical are the seven elements comprising the industry environment.

The external environment facing business stays relatively constant over time.

The likelihood of entry of new competitors is affected by ____ and ____.