BUSA 4980 CHAPTER 2 QUESTIONS WITH VERIFIED
ANSWERS
What are the 4 steps in the analysis process? - Answers - Scanning (ID early signals of
environmental changes and trends)
Monitoring (Detect meaning through observation)
Forecasting (Develop projections based on anticipated outcomes)
Assessing (Determine the timing and importance of environmental changes and trends
for the firm's strategy)
What are you looking for in the analysis process? - Answers - Opportunities and threats
(external)
What are the 6(7) segments of the general business environment? - Answers - PESTEL
Political
Economic
Sociocultural
Technological
Environment
Legal
What are some barriers to entry in the industry environment? (Threat of New entrants) -
Answers - Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost advantages independent of scale
Government policy
What is the bargaining power of suppliers in the industry environment? (Bargaining
power of suppliers) - Answers - Just a few large suppliers make up a small segment of
supplier customer base.
Supplier goods are critical for marketplace success.
High switching costs
Easy for suppliers to integrate forward
What is the bargaining power of buyers in the industry environment? ( Bargaining power
of suppliers) - Answers - One single buyer or very few large buyers
Low switching costs for buyers
Undifferentiated "commodity" product
Easy to reverse integrate into sellers' industry
ANSWERS
What are the 4 steps in the analysis process? - Answers - Scanning (ID early signals of
environmental changes and trends)
Monitoring (Detect meaning through observation)
Forecasting (Develop projections based on anticipated outcomes)
Assessing (Determine the timing and importance of environmental changes and trends
for the firm's strategy)
What are you looking for in the analysis process? - Answers - Opportunities and threats
(external)
What are the 6(7) segments of the general business environment? - Answers - PESTEL
Political
Economic
Sociocultural
Technological
Environment
Legal
What are some barriers to entry in the industry environment? (Threat of New entrants) -
Answers - Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost advantages independent of scale
Government policy
What is the bargaining power of suppliers in the industry environment? (Bargaining
power of suppliers) - Answers - Just a few large suppliers make up a small segment of
supplier customer base.
Supplier goods are critical for marketplace success.
High switching costs
Easy for suppliers to integrate forward
What is the bargaining power of buyers in the industry environment? ( Bargaining power
of suppliers) - Answers - One single buyer or very few large buyers
Low switching costs for buyers
Undifferentiated "commodity" product
Easy to reverse integrate into sellers' industry
