19. Contrary to popular belief, the global segment of the external environment does not provide many opportunities for firms such as H.J. Heinz, SAB Miller, and Citigroup, all of which recently experienced low growth and profits coming from emerging markets. a. True b. ANSWER: POINTS: 1 DIFFICULTY: Medium REFERENCES: 49 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 AACSB: Multicultural & Diversity | Management: Individual Dynamics | Dierdorff & Rubin: Managing decision-making processes | Bloom: Application 20. Globalfocusing is often used by firms with high levels of international operations who further increase their internationalization by focusing on global niche markets. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Hard REFERENCES: 50 LEARNING OBJECTIVES: STMA.HITT.13.Comprehension - Comprehension AACSB: Multicultural & Diversity | Management: Individual Dynamics | Dierdorff & Rubin: Managing decision-making processes | Bloom: Comprehension 21. Global warming and energy consumption are aspects of the technological environment segment that firms should monitor. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy REFERENCES: 48–49 LEARNING OBJECTIVES: STMA.HITT.13.Knowledge - Application AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Knowledge
34. The competitor analysis is the part of the external environment analysis and focuses on each company against which a firm directly competes (for example, Coca-Cola and PepsiCo, Home Depot and Lowe's, and Airbus and Boeing). a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy REFERENCES: 60, 62 LEARNING OBJECTIVES: STMA.HITT.13.Comprehension - Comprehension NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension 35. The process of competitor analysis should examine the competitor's future objectives, current strategy, assumptions, and capabilities. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Hard REFERENCES: 62 LEARNING OBJECTIVES: STMA.HITT.13.Comprehension - Comprehension NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension 36. When Delta Air Lines wants to study Continental Airlines, it must examine both Continental and its complementor, Star Alliance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Hard REFERENCES: 63 LEARNING OBJECTIVES: STMA.HITT.13.Comprehension - Comprehension NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension
48. Which of the following is NOT an activity used in the external environmental analysis process? a. scanning b. decrypting c. monitoring d. assessing ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: 40 LEARNING OBJECTIVES: STMA.HITT.13.Knowledge - Application NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing decision-making processes | Bloom: Knowledge 49. Environmental scanning would be most important for which of the following organizations? a. a provider of hospice services for the terminally ill b. a web design company catering to small businesses c. a neighborhood sewer and water utility d. a manufacturer of household linens ANSWER: b POINTS: 1 DIFFICULTY: Hard REFERENCES: 41–42 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing decision-making processes | Bloom: Application 50. The use of the Internet by Netflix to collect data on customer preferences is an example of a. assessing. b. monitoring. c. forecasting. d. scanning. ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: 41–42 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Managing the task environment | Bloom: Application
105. Circuit Corp. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component which is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal cost accounting estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely? a. Circuit will likely continue to manufacture the component, even at a loss, due to low supplier power. b. Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes. c. Circuit will likely discontinue manufacture of the component due to low strategic stakes. d. Circuit will likely discontinue manufacture of the component due to high supplier stakes. ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: 58–59 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Reflective Thinking Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension 106. Exit barriers to a firm include all of the following EXCEPT a. generic assets. b. loyalty to employees. c. governmental concern job loss. d. restrictive labor agreements. ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: 59 LEARNING OBJECTIVES: STMA.HITT.13.Knowledge - Application NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Knowledge 107. An owner of a stable of racehorses has been earning below-average returns for more than 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of a. high barriers to exit. b. high switching costs. c. high fixed costs. d. low levels of competitive rivalry. ANSWER: a POINTS: 1 DIFFICULTY: Hard REFERENCES: 59 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Application
120. Competitor intelligence could ethically come from all of the following EXCEPT a. court records. b. financial reports. c. show discussions. d. eavesdropping. ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: 63-64 LEARNING OBJECTIVES: STMA.HITT.13.Knowledge - Application NOTES: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Managing the task environment | Bloom: Knowledge 121. Which of the following represents a competitive intelligence practice that is both legal and ethical? a. A firm hires a competitor's employees and asks them to share the names and addresses of business contacts from their previous company. b. An executive attends a trade show solely to obtain a competitor's brochures, listen to sales pitches, and ask questions about the competitor's products. c. A city council member shares information about the decision process for selecting a contractor to build a new library wing with his wife, an executive with a construction firm bidding on the contract. d. A marketing manager at Smith-Phillips, Inc., sells confidential plans for the company's expansion into the Far East to a firm that is not a direct competitor. ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: 63 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Managing the task environment | Bloom: Application 122. Which of the following intelligence-gathering techniques is most likely to be legal and ethical? a. hiring investigators to examine the competitor's trash b. entering a competitor's production without authorization c. redirecting a competitor's emails to one's own company d. attending trade show presentations given by a competitor's employees ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: 63 LEARNING OBJECTIVES: STMA.HITT.13.Comprehension - Comprehension NOTES: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension
123. The U.S. Hispanic market is the third-largest "Latin American" economy behind Brazil and Mexico. This impacts the aspect of demographic segment analysis. a. age structure b. geographic distribution c. income distribution d. ethnic mix ANSWER: d POINTS: 1 NOTES: AACSB: Analytic | DISC:Environmental Influence | Bloom: Knowledge 124. New Jersey and New York have the highest state taxes in the United States. They also have high ratios of people moving out compared to people moving into the state. This impacts the aspect of demographic analysis. a. age structure b. geographic distribution c. income distribution d. ethnic mix ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: 44–45 AACSB: Analytic | DISC:Environmental Influence | Bloom: Knowledge 125. The communications industry is broadly defined as encompassing all of the following EXCEPT a. media companies. b. smartphone producers. c. book retailers. d. entertainment companies. ANSWER: c POINTS: 1 REFERENCES: 49 NOTES: AACSB: Analytic | DISC:Environmental Influence | Bloom: Knowledge 126. The Department of Defense buys aircraft from U.S. companies for national security reasons. This is an example of a barrier to entry. a. cost disadvantage independent of scale b. government policy c. capital requirements d. product differentiation ANSWER: b POINTS: 1 REFERENCES: 55 NOTES: AACSB: Analytic | DISC:Environmental Influence | Bloom: Knowledge