SEVI 3013 CH #2 EXAM QUESTIONS
AND ANSWERS
Strategic Group - Answer-clusters of firms that share similar strategies. Ex) Ford,
Toyota, GM. Ex)Ferrari, Bugatti
Perceptual Acuity: - Answer-the ability to sense what is coming before the fog clears.
SWOT Analysis: - Answer-a framework for analyzing a company's internal and external
environments and that stands for strengths, weaknesses, opportunities, and threats.
Environmental Scanning: - Answer-surveillance of a firm's external environment to
predict environmental changes and detect changes already under way.
Environmental Monitoring: - Answer-a firm's analysis of the external environment that
tracks the evolution of environmental trends, sequences of events, or streams of
activities.
General Environment: Economic - Answer-interest rate, unemployment rate, GDP,
National Debt, Stock Market Valuations
General Environment: Global - Answer-Exchange rates, trade, Trade agreements and
blocks, emergence of economies
Porter's Five Forces: - Answer-Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitutes
Competitive intensity
Threat of new entrants - Answer-•Economies of scale
•Product differentiation
•Capital requirements
•Switching costs
•Access to distribution channels
•Cost disadvantages independent of scale
O Favorable access to raw materials
o Government policies, subsidies
Bargaining power of suppliers - Answer-increases when:
•Suppliers are large and few in number
•No substitutes
•Many small buyers
•Suppliers' goods are critical
•High switching costs or highly differentiated product
AND ANSWERS
Strategic Group - Answer-clusters of firms that share similar strategies. Ex) Ford,
Toyota, GM. Ex)Ferrari, Bugatti
Perceptual Acuity: - Answer-the ability to sense what is coming before the fog clears.
SWOT Analysis: - Answer-a framework for analyzing a company's internal and external
environments and that stands for strengths, weaknesses, opportunities, and threats.
Environmental Scanning: - Answer-surveillance of a firm's external environment to
predict environmental changes and detect changes already under way.
Environmental Monitoring: - Answer-a firm's analysis of the external environment that
tracks the evolution of environmental trends, sequences of events, or streams of
activities.
General Environment: Economic - Answer-interest rate, unemployment rate, GDP,
National Debt, Stock Market Valuations
General Environment: Global - Answer-Exchange rates, trade, Trade agreements and
blocks, emergence of economies
Porter's Five Forces: - Answer-Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitutes
Competitive intensity
Threat of new entrants - Answer-•Economies of scale
•Product differentiation
•Capital requirements
•Switching costs
•Access to distribution channels
•Cost disadvantages independent of scale
O Favorable access to raw materials
o Government policies, subsidies
Bargaining power of suppliers - Answer-increases when:
•Suppliers are large and few in number
•No substitutes
•Many small buyers
•Suppliers' goods are critical
•High switching costs or highly differentiated product
