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attributed to OpenStax, Rice University and any changes must be noted.
Chapter 8 STRATEGIC ANALYSIS: UNDERSTANDING A FIRM'S COMPETITIVE ENVIRONMENT
TRUE-FALSE QUESTIONS
Title: ANSWER: T REFERENCE: Gaining Advantages by Understanding the Competitive Environment
LEARNING OUTCOME: 1
1. To react to change more easily and develop products consumers want, managers and consultants
engage in environmental scanning.
a. True
b. False
Title: ANSWER: F REFERENCE: Gaining Advantages by Understanding the Competitive Environment
LEARNING OUTCOME: 1
2. Internal factors are things in the global environment that may impact a firm’s operations or success,
examples are a rise in interest rates, or a natural disaster.
a. True
b. False
Title: ANSWER: T REFERENCE: Using SWOT for Strategic Analysis LEARNING OUTCOME: 2
3. A firm’s weaknesses are simply gaps in capabilities, and those gaps do not always have to be filled within
the firm.
a. True
b. False
Title: ANSWER: F REFERENCE: Using SWOT for Strategic Analysis LEARNING OUTCOME: 2
4. Threats offer positive potential, however sometimes a firm is not equipped to take advantage of them
which is why considering the entire SWOT is important before deciding what to do.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's External Macro Environment: PESTEL LEARNING OUTCOME: 3
5. A firm’s internal environment contains elements that can impact the firm but are generally beyond its
direct control.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's External Macro Environment: PESTEL LEARNING OUTCOME: 3
6. In PESTEL, factors are characterized as opportunities or threats.
a. True
b. False
Title: ANSWER: T REFERENCE: A Firm's External Macro Environment: PESTEL LEARNING OUTCOME: 3
7. Demographics includes facts about income, education levels, age groups, and the ethnic and racial
composition of a population.
a. True
b. False
Title: ANSWER: T REFERENCE: A Firm's Micro Environment: Porter's Five Forces LEARNING OUTCOME: 4
, Principles of Management
8. Firms in an industry may or may not compete directly against one another, as we’ll discuss shortly, but
they all face similar situations in terms of customer interests, supplier relations, and industry growth or
decline.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's Micro Environment: Porter's Five Forces LEARNING OUTCOME: 4
9. Strong rivalry in an industry increases the profit potential for all firms because consumers have many
firms from which to purchase products or services and can make at least part of their purchasing decisions
based on prices.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's Micro Environment: Porter's Five Forces LEARNING OUTCOME: 4
10. In the context of Porter’s model, a substitute is the similar products like rivals.
a. True
b. False
Title: ANSWER: T REFERENCE: The Internal Environment LEARNING OUTCOME: 5
11. A firm’s resources and capacities are the unique skills and assets it possesses.
a. True
b. False
Title: ANSWER: F REFERENCE: The Internal Environment LEARNING OUTCOME: 5
12. Support activities, according to the value chain, are the actions a firm takes to directly provide a
product or service to customers.
a. True
b. False
Title: ANSWER: T REFERENCE: Competition, Strategy, and Competitive Advantage LEARNING OUTCOME: 6
13. To achieve a competitive advantage over rivals in the industry, the successful cost leader tightly
controls costs throughout its value chain activities.
a. True
b. False
Title: ANSWER: F REFERENCE: Competition, Strategy, and Competitive Advantage LEARNING OUTCOME: 6
14. Rivalry is weakest within a strategic group, and the actions of one firm in a group generally does not
elicit responses from other group members, as market share in the industry is rarely affected.
a. True
b. False
Title: ANSWER: T REFERENCE: Strategic Positioning LEARNING OUTCOME: 7
15. A firm’s strategic position should try to be unique in some way that competitors cannot imitate quickly
or easily
a. True
b. False
MULTIPLE-CHOICE QUESTIONS
April 30, 2019 2
attributed to OpenStax, Rice University and any changes must be noted.
Chapter 8 STRATEGIC ANALYSIS: UNDERSTANDING A FIRM'S COMPETITIVE ENVIRONMENT
TRUE-FALSE QUESTIONS
Title: ANSWER: T REFERENCE: Gaining Advantages by Understanding the Competitive Environment
LEARNING OUTCOME: 1
1. To react to change more easily and develop products consumers want, managers and consultants
engage in environmental scanning.
a. True
b. False
Title: ANSWER: F REFERENCE: Gaining Advantages by Understanding the Competitive Environment
LEARNING OUTCOME: 1
2. Internal factors are things in the global environment that may impact a firm’s operations or success,
examples are a rise in interest rates, or a natural disaster.
a. True
b. False
Title: ANSWER: T REFERENCE: Using SWOT for Strategic Analysis LEARNING OUTCOME: 2
3. A firm’s weaknesses are simply gaps in capabilities, and those gaps do not always have to be filled within
the firm.
a. True
b. False
Title: ANSWER: F REFERENCE: Using SWOT for Strategic Analysis LEARNING OUTCOME: 2
4. Threats offer positive potential, however sometimes a firm is not equipped to take advantage of them
which is why considering the entire SWOT is important before deciding what to do.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's External Macro Environment: PESTEL LEARNING OUTCOME: 3
5. A firm’s internal environment contains elements that can impact the firm but are generally beyond its
direct control.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's External Macro Environment: PESTEL LEARNING OUTCOME: 3
6. In PESTEL, factors are characterized as opportunities or threats.
a. True
b. False
Title: ANSWER: T REFERENCE: A Firm's External Macro Environment: PESTEL LEARNING OUTCOME: 3
7. Demographics includes facts about income, education levels, age groups, and the ethnic and racial
composition of a population.
a. True
b. False
Title: ANSWER: T REFERENCE: A Firm's Micro Environment: Porter's Five Forces LEARNING OUTCOME: 4
, Principles of Management
8. Firms in an industry may or may not compete directly against one another, as we’ll discuss shortly, but
they all face similar situations in terms of customer interests, supplier relations, and industry growth or
decline.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's Micro Environment: Porter's Five Forces LEARNING OUTCOME: 4
9. Strong rivalry in an industry increases the profit potential for all firms because consumers have many
firms from which to purchase products or services and can make at least part of their purchasing decisions
based on prices.
a. True
b. False
Title: ANSWER: F REFERENCE: A Firm's Micro Environment: Porter's Five Forces LEARNING OUTCOME: 4
10. In the context of Porter’s model, a substitute is the similar products like rivals.
a. True
b. False
Title: ANSWER: T REFERENCE: The Internal Environment LEARNING OUTCOME: 5
11. A firm’s resources and capacities are the unique skills and assets it possesses.
a. True
b. False
Title: ANSWER: F REFERENCE: The Internal Environment LEARNING OUTCOME: 5
12. Support activities, according to the value chain, are the actions a firm takes to directly provide a
product or service to customers.
a. True
b. False
Title: ANSWER: T REFERENCE: Competition, Strategy, and Competitive Advantage LEARNING OUTCOME: 6
13. To achieve a competitive advantage over rivals in the industry, the successful cost leader tightly
controls costs throughout its value chain activities.
a. True
b. False
Title: ANSWER: F REFERENCE: Competition, Strategy, and Competitive Advantage LEARNING OUTCOME: 6
14. Rivalry is weakest within a strategic group, and the actions of one firm in a group generally does not
elicit responses from other group members, as market share in the industry is rarely affected.
a. True
b. False
Title: ANSWER: T REFERENCE: Strategic Positioning LEARNING OUTCOME: 7
15. A firm’s strategic position should try to be unique in some way that competitors cannot imitate quickly
or easily
a. True
b. False
MULTIPLE-CHOICE QUESTIONS
April 30, 2019 2
