Question 1

Barriers to entry are factors that must be overcome by existing competitors if they are to continue to compete successfully.

Accepted Answer

A) True 
 B)False

Question 2

A scenario is a guess about the future.

Accepted Answer

A) True 
 B)False

Question 3

Porter's 5 forces analyses the macroenvironment.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following affects the bargaining power of customers?

Accepted Answer

A)   Rates of technological innovation
B)   The growth rate of the market
C)   Supplier switching costs for firms in the industry
D)   The number of customers and the volume of their purchasesE) B) and C)
F) All of the above

Question 5

PEST and Porter's 5 forces analysis are not connected with each other.

Accepted Answer

A) True 
 B)False

Question 6

Why does external analysis usually start with the macro- environment and proceed to industry analysis?

Accepted Answer

A)   Because knowledge of the wider environment facilitates a more grounded interpretation of the operating environment as the wider context shaping the industry is understood better.
B)   This is just a convention that has developed over time. It does not matter what order the analysis is done in.
C)   Because managers know about the operating environment already but need to study those issues they do not interact with on a daily basis such as PEST factors.
D)   Because it is important that the data on the operating environment data is very up- to- date so this should be collected last.E) A) and D)
F) All of the above A

Question 7

Which of the following are correct descriptions of Porter's 5 forces? Choose all that apply.

Accepted Answer

A)   The threat of suppliers
B)   The power of suppliers
C)   The power of rivalry
D)   The threat of substitutesE) A) and B)
F) All of the above

Question 8

What term is used for a plausible alternative views of how the business environment might develop in the future?

Accepted Answer

A)   Value driver
B)   Scenario
C)   Strategic option
D)   PestelateE) All of the above
F) A) and B)

Question 9

The bargaining power of suppliers depends on which of the following?

Accepted Answer

A)   The uniqueness and scarcity of the resource that suppliers provide
B)   Capital costs
C)   The profitability of the industry
D)   Value for money
E)   Low switching costsF) C) and D)
G) A) and B) A

Question 10

What are 'critical success factors'?

Accepted Answer

A)   They are the competencies that enable an organisation to outperform others in the same environment.
B)   They represent the secrets of success that an organisation tries to hide from rivals.
C)   They are the organisations major strengths, deriving from the way it deploys its resources.
D)   They are those product features that are particularly valued by customers and where the organisation must excel to outperform competition.E) None of the above
F) All of the above

Question 11

Which of the following issues is not likely to increase the competitive intensity in an industry?

Accepted Answer

A)   The company has powerful suppliers.
B)   There is a high threat of new entrants.
C)   The company has powerful buyers.
D)   There is a low threat of new entrants.E) A) and D)
F) All of the above

Question 12

At what level should the PESTEL framework be applied when analysing a given environment?

Accepted Answer

A)   The firm level
B)   The industry level
C)   The society level
D)   The market levelE) A) and D)
F) A) and B)

Question 13

Why is it important to undertake macroenvironmental analysis when the micro- environment has more impact on day- to- day operations?

Accepted Answer

A)   Because the macro and micro analyses are two key parts of the overall analysis and you would have an incomplete analysis otherwise.
B)   Because understanding trends in PESTEL factors enables an organisation to anticipate changes, threats and opportunities arising in the operating environment.
C)   Because managers ought to be aware of the current affairs issues represented by PESTEL factors.
D)   Because changes in the macroenvironment are barriers to the daily operations of the organisation. That is why they are called PESTEL factors.E) A) and B)
F) A) and D)

Question 14

Which of the following is not a consequence of globalisation?

Accepted Answer

A)   Ability to mass produce products at low cost for large markets
B)   Ability of businesses to co- ordinate their activities on a worldwide basis
C)   Ability to transport people, materials and products around the world
D)   Convergence in consumer tastes in certain markets
E)   Greater prosperity in less developed countriesF) A) and B)
G) B) and D)

Question 15

The differential impact of environmental drivers means: (Select one answer only)

Accepted Answer

A)   Competitors in an industry need to pursue different strategies.
B)   Some organisations are more competent than others.
C)   The same environmental changes will be an opportunity for some strategies and a threat to other strategies.
D)   The same environmental changes will be an opportunity for some organisations and a threat to others.E) A) and D)
F) A) and C) C

Question 16

PEST and Porter's 5 forces analysis should be applied to one organisation.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following five forces is/are most important during the decline stage of an industry life cycle?

Accepted Answer

A)   Threat of entry
B)   Rivalry
C)   Power of customers
D)   Power of suppliersE) B) and C)
F) A) and B)

Question 18

Which of the following may identify organisations that form a strategic group? Choose all that apply.

Accepted Answer

A)   They compete on similar bases.
B)   They are strategic business units within a single organisation.
C)   They have similar characteristics.
D)   They follow similar strategies.E) A) and B)
F) C) and D)

Question 19

Which of the following are not determinants of national advantage (Porter's diamond) ?

Accepted Answer

A)   Related and supporting industries
B)   Competitive rivalry
C)   Firm strategy, structure and rivalry
D)   Demand conditions
E)   Factor conditionsF) B) and E)
G) B) and C)

Question 20

Which of the following is not an example of a barrier to entry?

Accepted Answer

A)   Low switching costs
B)   Capital costs
C)   High switching costs
D)   Access to distribution
E)   Intellectual property rightsF) B) and E)
G) C) and E)

Exam 2: The Environment

Barriers to entry are factors that must be overcome by existing competitors if they are to continue to compete successfully.

Correct AnswerverifiedShow Answer

A scenario is a guess about the future.

Correct AnswerverifiedShow Answer

Porter's 5 forces analyses the macroenvironment.

Correct AnswerverifiedShow Answer

Which of the following affects the bargaining power of customers?

Correct AnswerverifiedShow Answer

PEST and Porter's 5 forces analysis are not connected with each other.

Correct AnswerverifiedShow Answer

Why does external analysis usually start with the macro- environment and proceed to industry analysis?

Correct AnswerverifiedA

Which of the following are correct descriptions of Porter's 5 forces? Choose all that apply.

Correct AnswerverifiedShow Answer

What term is used for a plausible alternative views of how the business environment might develop in the future?

Correct AnswerverifiedShow Answer

The bargaining power of suppliers depends on which of the following?

Correct AnswerverifiedA

What are 'critical success factors'?

Correct AnswerverifiedShow Answer

Which of the following issues is not likely to increase the competitive intensity in an industry?

Correct AnswerverifiedShow Answer

At what level should the PESTEL framework be applied when analysing a given environment?

Correct AnswerverifiedShow Answer

Why is it important to undertake macroenvironmental analysis when the micro- environment has more impact on day- to- day operations?

Correct AnswerverifiedShow Answer

Which of the following is not a consequence of globalisation?

Correct AnswerverifiedShow Answer

The differential impact of environmental drivers means: (Select one answer only)

Correct AnswerverifiedC

PEST and Porter's 5 forces analysis should be applied to one organisation.

Correct AnswerverifiedShow Answer

Which of the following five forces is/are most important during the decline stage of an industry life cycle?

Correct AnswerverifiedShow Answer

Which of the following may identify organisations that form a strategic group? Choose all that apply.

Correct AnswerverifiedShow Answer

Which of the following are not determinants of national advantage (Porter's diamond) ?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a barrier to entry?

Correct AnswerverifiedShow Answer

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A

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A

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C

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