Ch.3 Evaluating the External Environment

Question 1

Consists of the set of external conditions and forces that have the potential to influence the organization.

Answer 1

Environment

Question 2

Include overall trends and events in society such as social trends, technological trends, demographics, and economic conditions.

also known as macroenvironment

Answer 2

General Environment

Question 3

Consists of organizations that collectively compete with one another by providing goods, services, or both.

Answer 3

Industry environment

Question 4

Events and trends that create chances to improve an organization’s performance level.

Answer 4

Opportunities

Question 5

Events and trends that may undermine an organization’s performance.

Answer 5

Threats

Question 6

Tool that executives can rely upon to organize factors within the general environment and identify how these factors influence industries and the companies within them.

political, economic, social, technological, environmental, legal

Answer 6

PESTEL Analysis

Question 7

portion involving government, tax policies, changing in trade restrictions and tariffs, and the stability of governments.

Answer 7

Political segment

Question 8

portion of economic and financial conditions including interest rates, inflation orates, gross domestic product, unemployment rates, levels of disposable income, and the general growth or decline of the economy.

Answer 8

Economic segment

Question 9

Portion that involves factors including trends in demographics such as population size, age, and ethnic mix, as well as cultural trends such as attitudes toward obesity and activism.

Answer 9

Social segment

Question 10

portion that centers on improvements in products and services that are provided by science, for example, change in the rate of a new product development, increases in automation, and advancements in service industry delivery.

Answer 10

Technological segment

Question 11

portion that involves the physical conditions within which organizations operate, for example. natural disasters and weather patterns.

Answer 11

Environmental segment

Question 12

portion that centers on how the courts influence businesses activity and legal factors including laws involving issues such as employment, health and safety, discrimination, and antitrust.

Answer 12

Legal segment

Question 13

• Most popular analytical tool in the business world.
• used to identify how much profit potential exists in an industry.
• considers the interactions among the competitors in an industry, potential new entrants to the industry, substitutes for the industry’s offerings, suppliers to the industry, and the industry’s buyers.

Answer 13

Five forces analysis

Question 14

1. Competitive Rivalry
2. Buyers
3. Substitute Products
4. New Entrants
5. Suppliers
6. Buyers

Answer 14

Porter’s Five Forces

Question 15

Companies that produce very similar products or services.

Answer 15

Competitors

Question 16

factors that make it difficult for a company to stop competing in an industry

Answer 16

Exit barriers

Question 17

Companies that do not currently compete in the idustry but may in the future.

Answer 17

Potential new entrants

Question 18

Offerings that differ from the goods and services provided by the competitors in an industry, but that fill similar needs to what the industry offers.

Answer 18

Threat of substitutes

Question 19

Providers of inputs that the competitors in an industry need to create goods or services.

Answer 19

Power of Suppliers

Question 20

Suppliers possess power to the extent that they have ability to become a new entrant to the industry if they wish.

Answer 20

Forward vertical integration

Question 21

Purchasers of the goods or services that the companies in an industry.

Answer 21

Power of a buyer

Question 22

Buyers possess power to the extent that they have the ability to become a new entrant to the industry if they wish.

Answer 22

Backward vertical integration

Question 23

Consist of a set of industry competitors that have similar characteristics to each other but different in important ways from the members of other groups.

Answer 23

Strategic groups