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22 Cards in this Set

  • Front
  • Back
To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, technological, and global trends
Motor vehicle firms in the United States are vulnerable when the value of the dollar falls.
A low value of the dollar means lower exports and higher imports.
The United States is getting older and less Caucasian.
Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts.
Internal opportunities can be represented by major competitors’ weaknesses.
Competitive intelligence is not considered corporate espionage because 95 percent of the information a company needs to make strategic decisions is available and accessible to the public.
Because companies are fearful of corporate espionage, cooperative agreements between competitors are becoming less popular.
(false; difficult; p. 85; AACSB: Ethical understanding and reasoning abilities)
According to Michael Porter, five competitive forces create vital opportunities and threats to organizations: (1) new entrants, (2) substitute products or services, (3) bargaining power of suppliers, (4) bargaining power of buyers, and (5) rivalry among existing firms.
(true; medium; p. 87)
Rampant corruption and the absence of a legal system are risks that still restrain firms from initiating business with China.
(true; medium; p. 92; AACSB: Ethical understanding and reasoning abilities)
In 2006, china produced more automobiles than Germany.
(true; medium; p. 92; AACSB: Multicultural and diversity understanding)
__________ is not part of an external audit.
a. Analyzing competitors
b. Analyzing financial ratios
c. Analyzing available technologies
d. Studying the political environment
e. Analyzing social, cultural, demographic and geographic forces
(b Analyzing financial ratios; p. 72)
To perform an external audit, a company first must:
a. get an approval from the Securities and Exchange Commission
b. perform an internal audit
c. gather competitive intelligence and information about external trends
d. hire a consultant to develop a comprehensive strategic plan.
e. all of these
(c. gather competitive intelligence and information about external p. 73)
The I/O approach to competitive advantage advocates that external factors are ________ internal factors in a firm achieving competitive advantage.
a. less important than
b. as important as
c. more important than
d. more common than
e. less common than
(c more important than p. 74)
It is predicted that the United States will have how many racial or ethnic majorities by the year 2075?
a. none
b. one
c two
d. three
e. five
(a. none p. 76)
Who are the world’s longest-living people?
a. Americans.
b. Mexicans.
c. Indians
d. Filipinos.
e. Japanese.
(e Japanese; p. 77; AACSB: Multicultural
When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit.
a. economic
b. political
c. technological
d. competitive
e. multinational
(b political; difficult; p. 77)
Who is Japan’s largest trading partner?
a. Mexico
b. China
c. U.S.
d. U.K.
e. Germany
(b China; medium; p. 80; AACSB
Technological advancements can create new ______ advantages that are more powerful than existing advantages.
a. economic
b. social
c. environmental
d. competitive
e. comparative
(d competitive; easy; p. 81)
Which of the following is not a characteristic that describes the most competitive companies in America?
a. Divestiture is essential to growth
b. People make a difference
c. Innovate or evaporate
d. There is no substitute for quality and no greater threat than failing to be cost-competitive on a global basis.
e. Whether it’s broke or not, fix it
(a Divestiture is essential to growth; medium; p. 83)
What is not one of Michael Porter’s five competitive forces?
a. New entrants
b. Rivalry among existing firms
c. Bargaining power of unions
d. Bargaining power of suppliers
e. Bargaining power of buyers
(c Bargaining power of unions; easy; p. 87)
According to Porter, what is usually the most powerful of the five competitive forces?
a. Potential development of substitute products
b. Bargaining power of suppliers
c. Bargaining power of consumers
d. Rivalry among competing firms
e. Potential entry of new competitors
(d Rivalry among competing firms; difficult; p. 88; AACSB: Reflective thinking skills)