5.The industry environment directly influences a firm andits competitive actions andresponses.(A) True(B) FalseAnswer :(A) Show 6.Competitor analysis is focused on thefactors andconditions influencing an industry's profitability potential.(A) True(B) FalseAnswer :(B)7.When firms analyze the external environment, they typically have complete and unambiguous data.(A) True (B)FalseAnswer :(B)8.Monitoring involves thedevelopment of a forecast of whatmight happen at a future pointin time.(A) True(B) FalseAnswer :(B)9.Scanning involves detecting meaning through earlysignals of environmental trends.(A) True(B) FalseAnswer :(B) 10.When Google studies the internet user privacy policies of various nations, it is engaged in the forecastingcomponent of the environmental analysis process.(A) True (B)FalseAnswer :(B)11.The objective of assessing the external environment is to determine the timing and importance of the effectsof environmental changes and trends on the strategic management of the firm.(A) True(B) False Answer :(A)12.Age structure, geographic distribution, income distribution, interest rates, and process innovations areall elements of concern when studying the demographic segment of the general environment.(A) True (B)FalseAnswer :(B)13.In recent times, business leaders have become more confident in the ability of economists to providevalid and reliable predictions about the world's economic environment.(A) True (B)FalseAnswer :(B)14.The legislation introduced in the U.S. Congress during the early tenure of the Obama administrationintended to reduce the amount of work U.S. companies outsource and is an example of a potential change in thesociocultural segment of the general environment.(A) True (B)FalseAnswer :(B)15.The European sovereign-debt crisis and political upheavals in Egypt, Tunisia, Libya, and Syria illustrateuncertainties in the political/legal segment of the general environment that could affect the performance of businessfirms. (A) True (B)FalseAnswer :(A)16.Developing a political strategy by the newly formed General Motors would likely be ineffective as firmsare generally unable to influence the political/legal environment.(A) True(B) FalseAnswer :(B) 17.Although health care reform legislation was passed in the early part of the Obama administration, itcontinues to be a contentious issue for employers, employees, and politicians because of its increasedexpenses. These attitudes about health care reform make up the sociocultural segment of the generalenvironment.(A) True (B)FalseAnswer :(A)18.Early adopters of new technology often achieve higher market shares and higher returns than later adoptersof the technology.(A) True (B)FalseAnswer :(A)19.Contrary to popular belief, the global segment of the external environment does not provide manyopportunities for firms that recently experienced low growth and profits coming from emerging markets. Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document •Theindustry environmentis a set of factors that directly influences a firmand its competitive actions and responses:•The threat of new entrants•The power of suppliers•The power of buyers•The threat of product substitutes•The intensity of rivalry among competing firms•How companies gather and interpret information about their competitorsindividually is calledcompetitor analysis.•Understanding the firm’s competitor environment complements the insightsprovided by studying the general and industry environments. 2-1The General, Industry, and CompetitorEnvironments(slide 3 of 3)•An analysis of the general environment focuses on environmental trendsand their implications.•An analysis of the industry environment focuses on the factors andconditions influencing an industry’s profitability potential.•An analysis of competitors is focused on predicting competitors’ actions,responses, and intentions.•In combination, the results of these three analyses influence the firm’s:•Vision•Mission•Choice of strategies•Competitive actions and responses it will take to implement those strategies 2-2External Environmental Analysis(slide 1 of 2)•To cope with often ambiguous and incompleteenvironmental data and to increase understanding ofthe ever changing general environment, firmscomplete anexternal environmental analysis.•The four parts of an external environmental analysis are:1. Scanning2. Monitoring3. Forecasting4. Assessing Table 2.2Parts of the External Environmental AnalysisScanning•Identifying early signals of environmental changes and trendsMonitoring•Detecting meaning through ongoing observations ofenvironmental changes and trendsForecasting•Developing projections of anticipated outcomes based onmonitored changes and trendsAssessing•Determining the timing and importance of environmentalchanges and trends for firms’ strategies and their management 2-2External Environmental Analysis(slide 2 of 2)•Identifying opportunities and threats (two parts of SWOTanalysis) is an important objective of studying the generalenvironment.•Anopportunityis a condition in the general environment that, ifexploited effectively, helps a company reach strategic competitiveness.•Athreatis a condition in the general environment that may hinder acompany’s efforts to achieve strategic competitiveness.•Effective scanning, monitoring, forecasting, and assessing arevital to the firm’s efforts to recognize and evaluateopportunities and threats. 2-2aScanning•Scanning entails the study of all segments in the generalenvironment.•Through scanning, firms:•Identify early signals of potential changes in the generalenvironment•Detect changes that are already under way•The Internet provides a wealth of opportunities forscanning. 2-2bMonitoring•When monitoring, analysts observe environmentalchanges to see if an important trend is emerging fromamong those spotted through scanning. Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 45 pages? Upload your study docs or become a Course Hero member to access this document When firms analyze the external environment they typically have complete and unambiguous data group of answer choices?When firms analyze the external environment, they typically have complete and unambiguous data. Monitoring involves the development of a forecast of what might happen at a future point in time. Scanning involves detecting meaning through early signals of environmental trends.
What is an important objective for firms to study the general environment?Determining the timing and importance of environmental changes and trends for firms' strategies and management. Analyzing the external environment is a difficult, yet significant, activity. Identifying opportunities and threats is an important objective of studying the general environment.
What is the external environment analysis process?External environment analysis is an analysis of macro-environmental forces, industry analysis and competitor analysis as it influences and potentially impacts the organization. The external environment can be broken down into two types: the micro environment and the macro environment.
What is general environment in strategic management?What is the general environment? The general environment, or macro-environment, is the variety of factors beyond an organization's control that affect their operation and performance. These external influencers can determine whether a business experiences opportunities or setbacks in the marketplace.
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The industry environment directly influences a firm and its competitive actions and responses
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