External Environmental Variables Identification Quiz
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External Environmental Variables Identification Quiz

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Questions and Answers

Which of the following is NOT considered part of a corporation's task environment?

  • Competitors
  • Suppliers
  • Special-interest groups
  • Shareholders (correct)

    • Which of the following is a key factor in conducting an industry analysis?

  • Examining the firm's financial statements
  • Analyzing the firm's internal resources
  • Monitoring trends in the societal environment
  • Studying the key elements within the corporation's task environment (correct)

    • Which of the following is NOT considered part of the natural environment?

  • Wildlife
  • Physical resources
  • Macroeconomic factors (correct)
  • Climate

    • Which of the following is a way to measure a firm's commitment to sustainability?

    <p>Calculating the firm's carbon footprint</p> Signup and view all the answers

    Which of the following is NOT considered part of the STEEP analysis?

    <p>Organizational forces</p> Signup and view all the answers

    What does environmental uncertainty in an organization's external environment refer to?

    <p>The complexity and change in an organization's external environment</p> Signup and view all the answers

    Which of the following is NOT considered a part of the natural environment?

    <p>Technological resources</p> Signup and view all the answers

    What does the societal environment refer to within an organization's external analysis?

    <p>Economic, technological, political-legal, and sociocultural factors</p> Signup and view all the answers

    In external environmental analysis, what does 'sustainability' most closely relate to?

    <p>Ensuring long-term environmental and social well-being</p> Signup and view all the answers

    Why is environmental uncertainty considered to be increasing in organizations?

    <p>As a result of markets becoming more global and technological changes</p> Signup and view all the answers

    Which of the following is NOT one of the learning objectives covered in this chapter?

    <p>Analyze the impact of the organization's financial performance on its strategic decisions</p> Signup and view all the answers

    Which of the following best describes the concept of 'industry maturity' as discussed in the text?

    <p>The stage of the industry's life cycle and how it affects competitive forces</p> Signup and view all the answers

    Which of the following is NOT considered an aspect of an organization's environment that can influence its long-term decisions, according to the text?

    <p>The organization's financial performance</p> Signup and view all the answers

    Which of the following is a key step in conducting an industry analysis, as discussed in the text?

    <p>Developing an industry scenario as a forecasting technique</p> Signup and view all the answers

    Which of the following is a way to categorize international industries based on their pressures for coordination and local responsiveness?

    <p>Global, multinational, international, and transnational</p> Signup and view all the answers

    Which category of risk is NOT mentioned in the text under Sociocultural Trends?

    <p>Technological</p> Signup and view all the answers

    What is a key trend in the current Sociocultural Environment?

    <p>Increasing environmental awareness</p> Signup and view all the answers

    What characterizes a Multinational Corporation (MNC) according to the text?

    <p>Significant assets and activities in multiple countries</p> Signup and view all the answers

    Which of the following is a key variable in the societal environment that businesses must consider when analyzing their industry?

    <p>New developments in technology transfer from lab to marketplace</p> Signup and view all the answers

    Which of the following is an important economic variable that businesses should monitor as part of their environmental analysis?

    <p>Devaluation/revaluation</p> Signup and view all the answers

    Which of the following is a key ecological variable that businesses should consider in their sustainability efforts?

    <p>Energy alternatives</p> Signup and view all the answers

    Which of the following is an important political-legal variable that can impact a business's operations?

    <p>Immigration laws</p> Signup and view all the answers

    Which of the following is NOT one of the key variables that MNCs must consider when operating in international societal environments?

    <p>Availability of natural resources</p> Signup and view all the answers

    Which of the following is a key challenge for MNCs related to the natural environment when operating globally?

    <p>All of the above</p> Signup and view all the answers

    An MNC seeking to improve its sustainability efforts globally should MOST focus on:

    <p>Reducing its carbon footprint through new energy sources</p> Signup and view all the answers

    Which of the following would be the LEAST important consideration for an MNC analyzing the societal environment of a new target market?

    <p>The availability and cost of the country's energy resources</p> Signup and view all the answers

    An MNC seeking to expand its global operations should MOST prioritize understanding the:

    <p>All of the above are equally important priorities</p> Signup and view all the answers

    The Sociocultural Trends section does not mention declining mass market as a current trend.

    <p>False</p> Signup and view all the answers

    The text states that a Multinational Corporation (MNC) is a company with significant assets and activities in only one country.

    <p>False</p> Signup and view all the answers

    The STEEP analysis framework does not include the 'Technological' category.

    <p>False</p> Signup and view all the answers

    The text states that 'Increasing diversity of workforce and markets' is not considered a current Sociocultural Trend.

    <p>False</p> Signup and view all the answers

    The text does not mention 'Litigation' as a category of risk that businesses should consider.

    <p>False</p> Signup and view all the answers

    The text does not mention 'Reputational' as a category of risk that businesses should consider.

    <p>False</p> Signup and view all the answers

    What is the purpose of combining assumptions about individual trends into internally consistent scenarios?

    <p>To develop coherent and plausible future situations</p> Signup and view all the answers

    In the context of the text, what is a key task environment force that involves predicting competitors' behavior under different scenarios?

    <p>Competitors</p> Signup and view all the answers

    Based on the text, which of the following forces of the task environment is related to identifying uncertainties in potential new entrants to an industry?

    <p>Potential entrants</p> Signup and view all the answers

    Which force of the task environment focuses on determining the sources of competitive advantage under different scenarios?

    <p>Competitors</p> Signup and view all the answers

    Why is competitive intelligence important for companies?

    <p>To gather information on competitors for strategic planning</p> Signup and view all the answers

    What does monitoring competitors for strategic planning involve?

    <p>Identifying the competitors' target customers and their strategies</p> Signup and view all the answers

    In an industry analysis, what role do key success factors play?

    <p>They summarize the factors influencing competition within an industry</p> Signup and view all the answers

    What differentiates competitive intelligence from regular business operations?

    <p>It gathers information specifically on competitors for strategic decision-making</p> Signup and view all the answers

    Which of the following is a key barrier to entry that can prevent new competitors from entering an industry?

    <p>High levels of government regulation and policy</p> Signup and view all the answers

    Which factor, according to Porter, is most likely to contribute to intense rivalry among existing firms in an industry?

    <p>Diverse range of competitors with different strategies</p> Signup and view all the answers

    Which of the following is NOT considered a potential barrier to entry that can deter new competitors from entering an industry?

    <p>Low levels of government regulation and policy</p> Signup and view all the answers

    Which factor is LEAST likely to contribute to intense rivalry among existing firms in an industry, according to Porter's framework?

    <p>Slow rate of industry growth</p> Signup and view all the answers

    Which of the following is NOT considered a potential threat of new entrants to an industry, according to the text?

    <p>Reducing overall industry profitability</p> Signup and view all the answers

    Study Notes

    Environmental Analysis and Industry Analysis

    • Environmental analysis is the monitoring, evaluation, and dissemination of information relevant to the organizational development of strategy.
    • It involves analyzing the external environment, including the task environment, societal environment, and natural environment.

    Task Environment

    • The task environment consists of entities that directly affect a corporation and are affected by it.
    • Elements of the task environment include:
      • Government
      • Local communities
      • Suppliers
      • Competitors
      • Customers
      • Creditors
      • Employees/labor unions
      • Special-interest groups
      • Trade associations

    Societal Environment

    • The societal environment includes general forces that do not directly touch on the short-run activities of the organization but can influence its long-term decisions.
    • Factors of the societal environment include:
      • Economic
      • Technological
      • Political-legal
      • Sociocultural
      • Ecological

    Natural Environment

    • The natural environment includes physical resources, wildlife, and climate.
    • Exploitation of natural resources can result in externalities, or side effects, such as pollution.
    • Sustainability is premised on the view that long-term survival of society depends on the responsible use of natural resources.

    STEEP Analysis

    • STEEP analysis is a framework for monitoring trends in the societal and natural environments.
    • The STEEP acronym stands for:
      • Sociocultural
      • Technological
      • Economic
      • Ecological
      • Political-legal

    Industry Analysis

    • Industry analysis is an in-depth examination of key factors within a corporation's task environment.
    • It involves analyzing the competitive forces that influence the intensity of rivalry within an industry.

    Competitive Forces

    • Threat of new entrants: new entrants to an industry bring new capacity, a desire to gain market share, and substantial resources.
    • Rivalry among existing firms: intense rivalry is related to the presence of several factors, including number of competitors, rate of industry growth, product or service characteristics, and more.

    External Factor Analysis Summary (EFAS Table)

    • An EFAS table is a tool for summarizing external factors that affect a company's strategic position.
    • It involves listing opportunities and threats, weighting each factor, rating each factor, and calculating a weighted score for each factor.

    International Societal Considerations

    • Multinational corporations (MNCs) are companies with significant assets and activities in multiple countries.
    • MNCs conduct activities such as marketing, financial, manufacturing, and other functional activities in multiple countries.

    Useful Forecasting Techniques

    • Identify uncertainties in each of the six forces of the task environment.
    • Make a range of plausible assumptions about future trends.
    • Combine assumptions about individual trends into internally consistent scenarios.
    • Analyze the industry situation that would prevail under each scenario.
    • Determine the sources of competitive advantage under each scenario.
    • Predict competitors' behavior under each scenario.
    • Select the scenarios that are either most likely to occur or most likely to have a strong impact on the future of the company.

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    Strategic Management and Business Policy: Globalization, Innovation and Sustainability PDF

    Description

    Test your knowledge on identifying external environmental variables such as government, local communities, suppliers, competitors, and more that directly affect a corporation. This quiz covers topics like task environment and industry analysis.

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