Chapter 3: external environment

Question 1

stable external environment

Answer 1

[little change, change slow to occur, change easy to predict],

Question 2

turbulent external environment

Answer 2

[much change, rapid change, change difficult to predict],

Question 3

punctuated equilibrium external environment

Answer 3

[long periods of stability, followed by a brief period of intense turbulence, followed by a return to stability].

Question 4

effective managers in successful firms perform ______ to stay informed about events in the external environment that could help (opportunities) or hurt (threats) the business.

Answer 4

environmental scanning

Question 5

_____ can potentially threaten a company or be an opportunity for it. For instance, a meat supplier can hurt a steakhouse by selling it inferior or damaged meat, by charging too high a price (cutting into the per-unit profit of the steakhouse) or failing to deliver needed quantities at the right time.

Answer 5

Suppliers

Question 6

by providing its business customer with high-quality supplies at a competitive price in volume the customer seeks, then the supplier could be an ______ to the firm.

Answer 6

opportunity

Question 7

can potentially threaten a company or be an opportunity for it. For instance, if a _____ limits the shelf space available to a manufacturer (e.g., if Walmart did not make available to clothing manufacturer Levi Strauss enough shelf space for Levi to sell its products to the public in the volume Levi desires, the distributor would be a threat.

Answer 7

distributor

Question 8

if Levi could command the shelf space it wanted and the distributor would pay Levi the price it seeks, the distributor would be an _______ .

Answer 8

opportunity

Question 9

(who provide key inputs to a firm producing goods and services)

Answer 9

suppliers

Question 10

(who play important roles in a firm’s making its products available to customers)

Answer 10

distributors

Question 11

. A supplier that has strong _______ (e.g., it is the sole supplier of an essential input such as existed when G.D. Searle was the only Nutra-Sweet supplier to Coke and to Pepsi) over a firm can dictate the price the firm pays for its inputs; a supplier with little bargaining power cannot. Similarly, a distributor that has strong bargaining power over a company (by providing customers much access or limited access to a firm’s products) can dictate the price it pays to the firm making the product; a distributor with weak bargaining power cannot dictate.

Answer 11

Bargaining power

Question 12

Customers can ____ a firm by (1) buying the product and – by staying loyal to the firm – buying products over and over again; (2) promoting the firm through positive word-of-mouth advertising that is effective because it’s free and believable, (3) giving a business ideas about what it should – and shouldn’t – be doing to satisfy customer needs and (4) by helping a firm to scan its environment by reporting what competitors are doing.

Answer 12

help

Question 13

Customers can ____ a firm by spreading bad word-of-mouth about their terrible experiences and by no longer buying a firm’s product

Answer 13

hurt

Question 14

Because customers are so important to any firm’s performance, well-managed companies do, ____ , _____.

Answer 14

reactive customer monitoring and proactive customer monitoring.

Question 15

[listening to their customers and responding to their wishes]

Answer 15

reactive customer monitoring

Question 16

[anticipating what customers want— before they tell the firm—and giving it to them].

Answer 16

proactive customer monitoring.