BUS5117 Strategic Management Unit 2 Graded Quiz — 25 Q&A
Verified Answers 2025
Course:
BUS5117 Strategic Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Graded Quiz Solutions — 25 Q&A with Verified Answers
BUS5117 Unit 2 Graded Quiz — External Environment Analysis
25 Questions with Verified Answers | Score: 96/100
Question 1:
What is the primary purpose of conducting a PESTLE analysis in strategic management?
A) To evaluate the macro-environmental factors that may impact a firm's strategy.
B) To assess the internal strengths and weaknesses of an organization.
C) To determine the competitive intensity within a specific industry.
D) To analyze the financial health and operational efficiency of competitors.
Answer: A
Explanation:
PESTLE analysis focuses on Political, Economic, Social, Technological, Legal, and Environmental
factors at the broad macro level. It does not assess internal organizational strengths (which is part
of SWOT) or industry-specific competitive intensity (which is Porter's domain). Thus, option A
correctly identifies its macro-environmental focus.
Question 2:
Which of the following conditions is most likely to increase the threat of new entrants into an
industry?
, A) High capital requirements for setting up operations.
B) Low switching costs for buyers.
C) Lack of access to established distribution channels.
D) Strong brand loyalty among existing customers.
Answer: B
Explanation:
Low switching costs make it incredibly easy for new companies to attract customers away from
established firms, thereby increasing the threat of entry. High capital requirements, lack of
distribution channels, and strong brand loyalty are all significant barriers to entry that protect
existing firms from new competitors.
Question 3:
A multinational tech company is planning to enter a new emerging market. They find that the local
government has recently passed strict data localization laws and there is a high inflation rate.
Which two components of the PESTLE analysis are primarily highlighted here?
A) Social and Technological
B) Political and Environmental
C) Legal and Economic
D) Legal and Social
Answer: C
Explanation:
Data localization laws are regulatory mandates imposed by governments, falling squarely under
the Legal dimension. High inflation impacts purchasing power and costs of doing business, which
is a key Economic indicator. Neither social nor technological factors are the primary focus of this
specific scenario.
Question 4:
In the context of Porter’s Five Forces, buyer power is typically highest when:
A) The products purchased are highly differentiated and unique.
B) Buyers purchase in small, infrequent quantities.
C) Buyers face high switching costs to change suppliers.
D) The buyer group is highly concentrated or purchases large volumes relative to seller sales.
Verified Answers 2025
Course:
BUS5117 Strategic Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Graded Quiz Solutions — 25 Q&A with Verified Answers
BUS5117 Unit 2 Graded Quiz — External Environment Analysis
25 Questions with Verified Answers | Score: 96/100
Question 1:
What is the primary purpose of conducting a PESTLE analysis in strategic management?
A) To evaluate the macro-environmental factors that may impact a firm's strategy.
B) To assess the internal strengths and weaknesses of an organization.
C) To determine the competitive intensity within a specific industry.
D) To analyze the financial health and operational efficiency of competitors.
Answer: A
Explanation:
PESTLE analysis focuses on Political, Economic, Social, Technological, Legal, and Environmental
factors at the broad macro level. It does not assess internal organizational strengths (which is part
of SWOT) or industry-specific competitive intensity (which is Porter's domain). Thus, option A
correctly identifies its macro-environmental focus.
Question 2:
Which of the following conditions is most likely to increase the threat of new entrants into an
industry?
, A) High capital requirements for setting up operations.
B) Low switching costs for buyers.
C) Lack of access to established distribution channels.
D) Strong brand loyalty among existing customers.
Answer: B
Explanation:
Low switching costs make it incredibly easy for new companies to attract customers away from
established firms, thereby increasing the threat of entry. High capital requirements, lack of
distribution channels, and strong brand loyalty are all significant barriers to entry that protect
existing firms from new competitors.
Question 3:
A multinational tech company is planning to enter a new emerging market. They find that the local
government has recently passed strict data localization laws and there is a high inflation rate.
Which two components of the PESTLE analysis are primarily highlighted here?
A) Social and Technological
B) Political and Environmental
C) Legal and Economic
D) Legal and Social
Answer: C
Explanation:
Data localization laws are regulatory mandates imposed by governments, falling squarely under
the Legal dimension. High inflation impacts purchasing power and costs of doing business, which
is a key Economic indicator. Neither social nor technological factors are the primary focus of this
specific scenario.
Question 4:
In the context of Porter’s Five Forces, buyer power is typically highest when:
A) The products purchased are highly differentiated and unique.
B) Buyers purchase in small, infrequent quantities.
C) Buyers face high switching costs to change suppliers.
D) The buyer group is highly concentrated or purchases large volumes relative to seller sales.
