BUSI 490 Key Points (Chapter 2) questions with answers

BUSI 490 Key Points (Chapter 2)Understand the importance of developing forecasts of the business environment - correct answer Managers must analyze the external environment to minimize threats and exploit opportunities. Effective managers proactively anticipate and detect early warning signs, which may represent key threats or opportunities to their business model Explain why environmental scanning, environmental monitoring, and collecting competitive intelligence are critical inputs to forecasting - correct answer Enhancing awareness of the external environment depends on three important processes: environmental scanning, environmental monitoring, and gathering competitive intelligence These processes are used to develop environmental forecasts. Environmental forecasting involves the development of plausible projections about environmental changes Explain why scenario planning is a useful technique for firms competing in industries characterized by unpredictability and change - correct answer scenario analysis is a structured approach to environmental forecasting. It involves experts from various disciplines working together to create projections of future events Recognize the impact of the general environment on a firm's strategies and performance - correct answer The general environment is composed of factors external to an industry--and usually beyond a firm's control--that affect a firm's strategy. It can be divided into six segments: demographic, sociocultural, political/legal, technological, economic, and global Demographic segment - correct answer consists of observable characteristics of a population, such as age and race composition Sociocultural segment - correct answer describes the values, beliefs, and lifestyles of a society Political/legal segment - correct answer describes how a society creates and exercises power, including rules, laws, and taxation policies