Business Concepts Quiz
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Questions and Answers

What is the weighted score of the trend toward healthy eating eroding concession sales?

  • 0.18
  • 0.60
  • 0.48 (correct)
  • 0.12

Which competitive profile matrix rating indicates a poor response to a critical success factor?

  • 4
  • 1 (correct)
  • 2
  • 3

What percentage increase was reported for movies rented at local Red Box's?

  • 10%
  • 25%
  • 15%
  • 12% (correct)

What is the total weighted score calculated for the key external factors in the EFE Matrix?

<p>2.58 (C)</p> Signup and view all the answers

How much is the increase in county and city property taxes noted in the content?

<p>25% (A)</p> Signup and view all the answers

What is the primary focus of an external audit?

<p>Identifying and evaluating trends beyond a single firm's control (B)</p> Signup and view all the answers

Which of the following is NOT one of the five broad categories of external forces?

<p>Cultural forces (A)</p> Signup and view all the answers

Which factor is NOT part of the AQCD test?

<p>Diplomatic (D)</p> Signup and view all the answers

How can firms respond to external audit results?

<p>By formulating strategies that take advantage of opportunities or minimize threats (C)</p> Signup and view all the answers

What does the term 'SCDE' refer to in the context of external forces?

<p>Social, Cultural, Demographic, and Environmental (B)</p> Signup and view all the answers

Which of the following economic factors affects strategic decisions regarding consumption patterns?

<p>Unemployment trends (D)</p> Signup and view all the answers

Which of these statements best describes the AQCD test's admissibility criteria?

<p>Factors must be actionable, quantitative, comparative, and divisional. (D)</p> Signup and view all the answers

Which of the following best describes the overall goal of an external audit?

<p>To reveal key opportunities and threats for strategy formulation (B)</p> Signup and view all the answers

Which of the following is NOT considered a key SCDE variable?

<p>National budget deficit (A)</p> Signup and view all the answers

What is one method of obtaining competitive intelligence ethically?

<p>Reverse-engineering rival firms’ products (B)</p> Signup and view all the answers

Which of the following factors is aligned with political, governmental, and legal variables affecting organizations?

<p>Unionization trends (A)</p> Signup and view all the answers

What does competitive intelligence (CI) primarily focus on?

<p>Gathering and analyzing information about competition (B)</p> Signup and view all the answers

Among the following, which approach is part of identifying competitive forces?

<p>Evaluating supplier relationships (C)</p> Signup and view all the answers

Which of the following is a technology that is said to impact strategic-planning decisions?

<p>Artificial intelligence (B)</p> Signup and view all the answers

What represents a challenge in obtaining competitive intelligence?

<p>Legal restrictions on data gathering (A)</p> Signup and view all the answers

Which of the following describes the Five-Forces Model of Competition?

<p>A framework identifying key elements impacting competitive strength (D)</p> Signup and view all the answers

Which of the following is a common political force that can affect business strategies?

<p>Local employment laws (B)</p> Signup and view all the answers

In competitive intelligence, which practice is generally considered unethical?

<p>Using illegal surveillance (B)</p> Signup and view all the answers

Which technological advancement is expected to shape the future of many industries according to current trends?

<p>3D printing (D)</p> Signup and view all the answers

Which of the following best captures consumer behavior changes relevant to business strategies?

<p>Population demographics (B)</p> Signup and view all the answers

What factor is likely to signify the impact of social media on competitive positioning?

<p>Social-media conversation mastery (A)</p> Signup and view all the answers

Which of the following would NOT be considered a competitive force?

<p>Employee satisfaction levels (C)</p> Signup and view all the answers

What factors contribute to high rivalry among competing firms?

<p>Similar capabilities among firms (A)</p> Signup and view all the answers

Which of the following is NOT a barrier to entry in a market?

<p>Strong corporate partnerships (D)</p> Signup and view all the answers

Under what condition would the bargaining power of suppliers be considered high?

<p>High costs associated with switching to alternative suppliers (B)</p> Signup and view all the answers

What typically happens when the price of substitute products decreases?

<p>Consumer demand for original products may decrease (B)</p> Signup and view all the answers

Which factor increases the bargaining power of consumers?

<p>Low switching costs (A)</p> Signup and view all the answers

Which of the following could weaken barriers to entry in a market?

<p>New technologies that lower production costs (B)</p> Signup and view all the answers

What is a potential consequence of high fixed costs among competing firms?

<p>Firms may avoid aggressive price competition (A)</p> Signup and view all the answers

In what circumstance might a buyer possess significant bargaining power?

<p>The availability of many product options (C)</p> Signup and view all the answers

What role do governmental regulations typically play in market dynamics?

<p>They can act as barriers to entry (B)</p> Signup and view all the answers

Which situation would likely result in a market experiencing high pressure from substitutes?

<p>Rapid price reductions in substitute products (D)</p> Signup and view all the answers

What strategy might companies undertake to improve their bargaining position against suppliers?

<p>Invest in backward integration (A)</p> Signup and view all the answers

What effect does a lack of access to raw materials have on new entrants in a market?

<p>It increases barriers to entry (A)</p> Signup and view all the answers

In the context of industry analysis, what do key external factors typically include?

<p>Social, cultural, and economic influences (C)</p> Signup and view all the answers

How are weighted scores calculated in the EFE matrix?

<p>By multiplying weights by effectiveness ratings (C)</p> Signup and view all the answers

Flashcards

External Audit

A process that identifies and evaluates trends and events outside a company's control, to uncover opportunities and threats. Managers use this to create strategies.

External Forces

Factors beyond a company's control that impact its strategies, divided into economic, SCDE, political/legal, technological, and competitive forces.

Economic Forces

External forces like interest rates, inflation, GDP, consumer spending, and unemployment trends. Impact a company's financial health.

SCDE Forces

Social, cultural, demographic, and environmental forces that shape how people live, work, and consume. Impact products and markets.

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AQCD Test

A method for evaluating the quality of an external factor, considering if it's actionable, quantitative, comparative, and divisional.

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Actionable (AQCD)

An external factor a company can respond to, using strategies to take advantage or mitigate.

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Quantitative (AQCD)

External factors that can be measured numerically for analysis and prioritization.

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Competitive Forces

External factors concerning competitors, market share, and industry trends.

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Immigrant

A person who moves into a country to live there.

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Emigrant

A person who leaves a country to live in another.

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Key SCDE Variables

Important factors affecting a population's size, demographics, and behaviors.

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Competitive Forces

Rivals in a market that affect a firm's strategies.

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Competitive Intelligence

Gathering information about competitors to gain an advantage.

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External Audit

Analysis of outside factors impacting a business.

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Form 10-K

Annual report filed by publicly traded companies.

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Five-Forces Model

A framework to understand industry competition.

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Political, Governmental, and Legal Forces

Laws, regulations, and politics influencing business.

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Technological Forces

New technologies shaping industries and firms.

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Chief Information Officer (CIO)

Executive responsible for company's information systems.

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Chief Technology Officer (CTO)

Executive responsible for company's technological advancements and strategy.

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Social-Media Data

Information gathered from social media platforms.

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Key Questions About Competitors

Important questions a business must consider for their main rivals.

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Reverse-engineer

To design a similar product by studying another's product

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Local, state, and federal laws

Regulations from the different levels of government

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Unemployment rate

Percentage of people actively seeking jobs but unable to find work in a specific area.

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EFE Matrix

A tool for analyzing external factors and assessing their impact on a business, like a cinema complex.

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Weighted Score (EFE)

A numerical value reflecting the importance and impact of a factor on a business, calculated by multiplying its weight and rating.

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Trend toward healthy eating

Increasing preference for healthy food choices among consumers.

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Competitive Profile Matrix (CPM)

Tool to analyze strengths and weaknesses of competitors compared to a company; assists in understanding competitors' strategic positions.

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Rivalry among firms

The competition between companies in an industry. It's often the strongest force affecting strategies.

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High rivalry conditions

Factors increasing competition, like many similar companies, rapidly changing demand, and easy switching for consumers.

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Barriers to entry

Obstacles that make it hard for new companies to enter a market.

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High barriers to entry

Significant obstacles for new businesses to start in an industry. Think difficult technology, strong brand loyalty, or high startup costs.

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Substitute products

Products that can fulfill the same need as another product. Think of coffee vs tea for example.

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Bargaining power of suppliers

How much control suppliers have over prices and availability of raw materials.

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Bargaining power of consumers

The amount of power customers have in influencing prices and product features.

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External factors

Conditions outside of a company's control that can affect its success.

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Industry analysis

Studying the market and its forces to understand potential opportunities and threats.

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EFE Matrix

A tool that evaluates external factors and determines if strategies are working effectively. It helps in strategy formulation and improvement.

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Forecasting

Making educated predictions about future events or trends in the market.

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Assumptions

Predictions or estimates about uncontrollable conditions that affect performance.

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Customer surveys

Gathering opinions and feedback from customers.

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Market research

Gathering information about the market environment.

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Competitive advantage

What sets a company apart in its industry and gives it an edge.

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