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BUSI 4940 Exam 1 Review - Chapter 1, 2 & Supplementary Lecture Material (1)
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BUSI 4940 Exam 1 Review - Chapter 1, 2 & Supplementary Lecture Material (1)
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BUSI 4940 Exam 1 Review Chapter 1, 2 &Supplementary Lecture Material
General Environment - CORRECT ANSWER-Factors in the external environment
that can affect the company, but the company can not directly affect back.
Or, dimensions in the broader society that influence an industry and the companies
within it. In general, firms cannot directly control or significantly impact the segments
of this environment.
For example, the U.S. economy is so big that one company can't do much to impact
it. However, the U.S. economy can impact any given company within it.
Industry Environment - CORRECT ANSWER-Factors that directly affect the
company's competitive actions and responses. But the company CAN have a
significant effect back on them as well.
Think the threat of new entrants, the power of suppliers and buyers, the threat of
substitutes, and rivalry among competing firms.
There are some actions suppliers can take that will affect your company, but there
are also actions you can take to affect your suppliers. Furthermore, customers can
also affect you, but you can also affect your customers.
Competitor Analysis - CORRECT ANSWER-How companies gather and interpret
information about their competitors is called ______________________.
General Environment - CORRECT ANSWER-The following are external factors that
are Segments and Elements of the _______________.
1. Political/Legal
2. Economic
3. Sociocultural
4. Technological
5. Demographic
6. Environmental
7. Global
We want to know if these will change and how they will affect our firm in the next 5
years.
,Opportunity - CORRECT ANSWER-A condition in the general environment that, if
exploited effectively, helps a company reach strategic competitiveness.
Threat - CORRECT ANSWER-A condition in the general environment that may
hinder a company's efforts to achieve strategic competitiveness.
External Environment Analysis - CORRECT ANSWER-This process is
_____________________,
1. Scanning: Identifying early signals of environmental changes and trends
2. Monitoring: Detecting meaning through ongoing observations of environmental
changes and trends.
3. Forecasting: Developing projections of anticipated outcomes based on monitored
changes and trends.
4. Assessing: Determining the timing and importance of environmental changes and
trends for firms' strategies and their management.
Demographic - CORRECT ANSWER-Segment of General Environment concerned
with statistics regarding:
1) Population Size;
2) Age Structure;
3) Geographic Distribution;
4) Ethnic Mix;
5) Income Distribution
*Remember P. E. S. T. /D. E. G.
Economic - CORRECT ANSWER-Segment of General Environment that refers to
the nature and direction of the economy in which a firm competes or may compete;
Interest rates, inflation rates, GDP, Budget deficits/surpluses, personal savings rates,
unemployment.
*Remember P. E. S. T. /D. E. G.
Political/Legal - CORRECT ANSWER-Segment of General Environment that refers
to tax policies, trade restrictions, tariffs, subsidies, stability of the government,
antitrust, health & safety, discrimination, child labor.
Likely the most impactful potential issues a firm may face come from this segment.
, *Remember P. E. S. T. /D. E. G.
Sociocultural - CORRECT ANSWER-Segment of General Environment concerned
with a society's attitudes and cultural values; Women in the workforce, diversity,
shifts in preferences regarding product/service, work-life balance attitudes.
*Remember P. E. S. T. /D. E. G.
Technological - CORRECT ANSWER-Segment of General Environment that
includes the institutions and activities involved in creating new knowledge and
translating that knowledge into new outputs, products, processes, and materials;
Technological innovations, Industry 4.0 (smart factories), Industry 5.0 (robotics),
service delivery, new medicines.
*Remember P. E. S. T. /D. E. G.
Global - CORRECT ANSWER-Segment of General Environment that focuses on the
extent to which PEST-DEG type factors in other countries affect America or the
locations where your firm operates.
*Remember P. E. S. T. /D. E. G.
Environment - CORRECT ANSWER-Segment of General Environment that refers to
potential and actual changes in the physical environment (Natural disasters,
weather) and business practices that are intended to positively respond to those
changes in order to create a sustainable environment. (pollution, energy
consumption)
*Remember P. E. S. T. /D. E. G.
Industry - CORRECT ANSWER-A group of firms producing products that are close
substitutes or are related based on their primary business activities.
Basically, a group of companies that compete by providing similar goods, services,
or both.
Five Forces - CORRECT ANSWER-Michael Porter's _______________ Model is
mostly concerned with external Powers and Threats from the perspective of a
company in an industry.
Barriers to Entry - CORRECT ANSWER-The following are
_____________________.
1. Economies of Scale
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