LSUS MBA 705 - Minsun Kim Exam 1
CORRECT 100%
PESTEL Analysis - ANSWER 6 segments of general environment, use to identify how
these factors influence industries and the firms within them
P - Political
E- Economic
S- Socio- Cultural
T - Technological
E- Environmental
L - Legal
Political Factors - ANSWER -include tax policies, changes in trade restrictions and
tariffs, and stability of governments
- example : immigration policy, clean energy policies
Economic Factors - ANSWER - include elements such as interest rates, inflation rates,
gross domestic product, unemployment rates, levels of disposable income and general
growth or decline of economy
- example: Covid crisis of 2020
Unemployment Rate - ANSWER percentage of labor force looking for employment over
the last 4 weeks
Housing Starts - ANSWER number of houses, apartments and condos on which new
construction has been started
- includes concrete, steel, wood, plumbing, and banks as suppliers, carefully watched
measure of economic condition
Gross Domestic Product (GDP) - ANSWER - market value of goods and services within
a country produced in a given time period
-rough indicator of a country's standard of living
Federal Reserve System ("The Fed") - ANSWER US's central banking system, attempts
to strengthen economy, ie by setting short-term interest rates
Discretionary Income - ANSWER amount of money individuals have to spend after all
bills are paid
Socio-cultural factors - ANSWER -capture a society's cultures norms, societal values
and trends
- trends in demographics such as population size, age, ethnic mix, as well as attitudes
toward obesity and consumer activism
, Hemline Theory - ANSWER -women's skirt lengths predict stock market increases and
decreases. Raised skirts when times are good, lowered skirts in tough economic times
Technological Factors - ANSWER -centers on improvements in products and services
that are provided by science
-ie changes in product development, increases in automation and advancements in
service industry delivery
Moore's Law - ANSWER performance of microcircuit technology roughly doubles every
2 years
Environmental or Ecological Factors - ANSWER - physical/ecological conditions within
which an organization operates
-includes factors such as natural disasters, pollution levels, global warming and weather
patterns
Legal Factors - ANSWER - centers on how courts and laws influence business activity
- ie employment laws, health and safety regulations, discrimination and anti-trust laws
Intellectual Property - ANSWER A product of the intellect, such as an expressed idea or
concept, that has commercial value.
-ie pixar movie or adobe program, piracy of it would be illegal
Sherman Antitrust Law of 1890 - ANSWER limits cartels and monopolies in US
Industry - ANSWER group of firms that produce competing products/services
Industry Effects - ANSWER -firms within the same industry often have the same
suppliers and buyers
- firm performance is due to the structure of the industry in which the firm competes
- makes up 20% of a firm's performance
Firm Effects - ANSWER - firm performance due to actions strategic leaders take
- makes up 55% of a firm's performance
Other Effects of a Firm's Performance - ANSWER - business cycles, effects,
unexplained variance
-makes up 25% of firm's performance
Porter's Five Forces - ANSWER 1. Threat of potential entrants
2. Bargaining power of suppliers
3. Rivalry of industry competitors
4. Bargaining power of buyers
5. Threat of substitutes
CORRECT 100%
PESTEL Analysis - ANSWER 6 segments of general environment, use to identify how
these factors influence industries and the firms within them
P - Political
E- Economic
S- Socio- Cultural
T - Technological
E- Environmental
L - Legal
Political Factors - ANSWER -include tax policies, changes in trade restrictions and
tariffs, and stability of governments
- example : immigration policy, clean energy policies
Economic Factors - ANSWER - include elements such as interest rates, inflation rates,
gross domestic product, unemployment rates, levels of disposable income and general
growth or decline of economy
- example: Covid crisis of 2020
Unemployment Rate - ANSWER percentage of labor force looking for employment over
the last 4 weeks
Housing Starts - ANSWER number of houses, apartments and condos on which new
construction has been started
- includes concrete, steel, wood, plumbing, and banks as suppliers, carefully watched
measure of economic condition
Gross Domestic Product (GDP) - ANSWER - market value of goods and services within
a country produced in a given time period
-rough indicator of a country's standard of living
Federal Reserve System ("The Fed") - ANSWER US's central banking system, attempts
to strengthen economy, ie by setting short-term interest rates
Discretionary Income - ANSWER amount of money individuals have to spend after all
bills are paid
Socio-cultural factors - ANSWER -capture a society's cultures norms, societal values
and trends
- trends in demographics such as population size, age, ethnic mix, as well as attitudes
toward obesity and consumer activism
, Hemline Theory - ANSWER -women's skirt lengths predict stock market increases and
decreases. Raised skirts when times are good, lowered skirts in tough economic times
Technological Factors - ANSWER -centers on improvements in products and services
that are provided by science
-ie changes in product development, increases in automation and advancements in
service industry delivery
Moore's Law - ANSWER performance of microcircuit technology roughly doubles every
2 years
Environmental or Ecological Factors - ANSWER - physical/ecological conditions within
which an organization operates
-includes factors such as natural disasters, pollution levels, global warming and weather
patterns
Legal Factors - ANSWER - centers on how courts and laws influence business activity
- ie employment laws, health and safety regulations, discrimination and anti-trust laws
Intellectual Property - ANSWER A product of the intellect, such as an expressed idea or
concept, that has commercial value.
-ie pixar movie or adobe program, piracy of it would be illegal
Sherman Antitrust Law of 1890 - ANSWER limits cartels and monopolies in US
Industry - ANSWER group of firms that produce competing products/services
Industry Effects - ANSWER -firms within the same industry often have the same
suppliers and buyers
- firm performance is due to the structure of the industry in which the firm competes
- makes up 20% of a firm's performance
Firm Effects - ANSWER - firm performance due to actions strategic leaders take
- makes up 55% of a firm's performance
Other Effects of a Firm's Performance - ANSWER - business cycles, effects,
unexplained variance
-makes up 25% of firm's performance
Porter's Five Forces - ANSWER 1. Threat of potential entrants
2. Bargaining power of suppliers
3. Rivalry of industry competitors
4. Bargaining power of buyers
5. Threat of substitutes
