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I. TRUE OR FALSE
1. When a complementor's good and service
contributes to the functionality of a local firm's good
and service, it in turn creates additional value for that
firm? True or false? (TRUE)
2. Demographic segments are commonly analyzed on
a domestic basis because they do not affect other
countries. (FALSE)
3. Certain practices like blackmail, trespassing,
eavesdropping and the like are widely viewed as
ethical and often are illegal as well. (FALSE)
4. When monitoring, analysts develop feasible
projections of what might happen, and how quickly,
as a result of the events and trends detected through
scanning and monitoring. (FALSE)
5. Industry environment has a more direct effect on the
competitive actions and responses a firm takes to
succeed. (TRUE)
6. A supplier group is powerful when it is dominated by
many large companies and is more concentrated
than the industry to which it sells. (FALSE)
7. An opportunity is a condition in the general
environment that, if exploited effectively, helps a
company reach strategic competitiveness. (TRUE)
8. Firms avoid the possibility of legal entanglements
and ethical quandaries only when their competitive
intelligence gathering methods are governed by a
strict set of legal and ethical guidelines. (TRUE)
9. Compared with the general environment, the
industrial environment has more direct effect on the
competitive actions and responses a firm takes to
succeed. (TRUE)
10. It is uncommon for government to attempt to
regulate the entry of foreign firms, especially in
industries considered critical to the country's
economy/important markets within it. (TRUE)
11. Firms must follow relevant laws and regulations as
well as carefully articulated ethical guidelines when
gathering competitor intelligence. (TRUE)
12. The larger the number of competitors, along with the
number of equivalent products and services they
offer, the higher the power of a company. (FALSE,
higher should be lesser).
13. Sociocultural segment Refers to the nature and
direction of the economy in which a firm competes or
may compete. – FALSE
14. Strategic group is a group of firms producing
products that are close substitutes.- FALSE
15. Sociocultural segment is never concerned with the
attitude and cultural values of a society. – FALSE
16. General, Industry, and competitors are the three
parts of the external environment that affect a firms
strategic action. – TRUE
17. Competitive intelligence is associated with
"corporate espionage". – TRUE
18. A competitor's current strategy revealed what it is
doing and can do. –TRUE
19. Substitute products are goods or services from the
same industry that perform similar or same functions
as a product that the industry is already producing. –
FALSE
20. Competitive Rivalry is likely to be low when it is
important for several of the competitors to perform
well in the market. – FALSE
21. When companies continue in an industry even
though the returns on their  invested capital are low
or even negative likely face high exit barriers –
TRUE
22. The sustainable physical environment segment
refers only to potential changes in the physical
environment and business practices that are
intended to positively respond to those changes with
the intent of creating a sustainable environment. –
FALSE

23. Identifying expected changes and trends among
segments and their elements is not an objective of
analyzing sustainable physical environment. -
FALSE
24. Compared with the general environment, the
industry environment has an indirect effect on the
competitive actions and responses a firm takes to
succeed. - FALSE
25. Scanning, controlling, monitoring, and forecasting
are the four parts of external environment analysis
process. - FALSE
26. The general environment is composed of
dimensions and these dimensions are grouped into
segments namely economic, demographic,
political/legal, sociocultural, technological, global and
sustainable physical. – TRUE
27. Firms use multiple sources to analyze general
environment through scanning, monitoring,
evaluating and assessing. – FALSE
28. Scanning is detecting meaning through ongoing
observations of environmental changes and trends.
– FALSE
29. Understanding the competitor's environment
complements the insights provided by studying the
general and industry environments. – TRUE
30. Demographic segment concerns with society's
attitudes and cultural values. – FALSE
31. Scanning entails the study of all segments of an
industry environment. – FALSE
32. The general environment is composed of segments
that are internal the firm. – FALSE
33. Capabilities possessed by many rivals are unlikely to
become core competencies for any involved firms. –
TRUE
34. Social Complexity is one of the reasons why
capabilities can be costly to imitate. – TRUE.
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II. IDENTIFICATION
1. The objective of this is to determine the timing and
significance of the effects of environmental changes
and trends that have been identified. (ASSESSING)
2. It is the arena in which organization and interest
groups compete for attention, resources, and a voice
in overseeing the body of laws and regulations
guiding interactions among nations as well as
between firms and various local governmental
agencies. (POLITICAL/LEGAL SEGMENT)
3. It is a condition in the general environment that may
hinder a company’s efforts to achieve strategic
competitiveness. (THREAT)
4. It entails the study of all segments in the general
environment. (SCANNING)
5. The __ includes relevant new global markets,
existing markets that are changing, important
international political events, and critical cultural and
institutional characteristics of global markets.
(GLOBAL SEGMENT)
6. _ is a set of data and information the firm gathers to
better understand and anticipate competitor's
objectives, strategies, assumptions, and capabilities.
(COMPETITOR INTELLIGENCE)
7. This is called developing projections of anticipated
outcomes based on monitored changes and trends.
(FORECASTING)
8. How competitors gather and interpret information
about their competitors is called __. (COMPETITOR
ANALYSIS)
9. It is an act of developing projections of anticipated
outcomes based on monitored changes and trend.
(FORECASTING)
10. It is one of the common exit barriers that firms face
which refers to assets with values that are linked to a
particular business or location. (SPECIALIZED
ASSETS)

11. These are derived from incremental efficiency
improvements through experience as a firm grows
larger. (ECONOMIES OF SCALE)
12. It is identifying early signals of environmental
changes. (SCANNING)
13. It is determining the timing and importance of
environmental changes and trends for firm's
strategies and their management. (ASSESSING)
14. This model expands the scope of a firm's
competitive analysis. (FIVE FORCES OF
COMPETITION MODEL)
15. This is composed of dimensions in the broader
society that influence an industry and the firms within
it. (GENERAL ENVIRONMENT)
16. This is a condition in the general environment that, if
exploited effectively, helps a company reach
strategic competitiveness. (OPPORTUNITY)
17. This is part of the external environmental analysis
wherein the objective is to determine the timing and
significance of the effects of environmental changes
and trends that have been identified. (ASSESSING)
18. Are derived from incremental efficiency
improvements through experience as a firm grows
larger. (ECONOMIES OF SCALE)
19. Are onetime costs customer incur when they buy
from a different supplier. (SWITCHING COST)
20. A segment of the general environment concerned
with the population's size, age structure, geographic
distribution, ethnic mix and income distribution.
(DEMOGRAPHIC SEGMENT)
21. A set of firms emphasizing similar strategic
dimension and using a similar strategy.
(STRATEGIC GROUP)
22. One of the segments of global environment
concerned with relevant new global markets, existing
markets that are changing, important international
political events, and critical cultural and institutional
characteristics of global markets. (GLOBAL
SEGMENT)
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23. It is often used by firms with moderate levels of
international operations who increase their
internalization by focusing on global niche markets.
(GLOBAL FOCUSING)
24. It refers to the potential and actual changes in the
physical environment and business practice that are
intended to positively respond to those changes with
the intent of creating sustainable environment.
(SUSTAINABLE PHYSICAL ENVIRONMENT
SEGMENT)
25. Q1. It is concerned with a population’s size, age
structure, geographic distribution, ethnic mix and
income distribution. (DEMOGRAPHIC SEGMENT)
26. A set of firms emphasizing similar strategic
dimensions and using a similar strategy.
(STRATEGIC GROUP)
27. A barrier to entry which refers to the impediment to a
customer's changing of suppliers. (SWITCHING
COST)
28. It refers to the nature and direction of the economy
in which a firm competes or may compete.
(ECONOMIC ENVIRONMENT)
29. A set of firms emphasizing similar strategic
dimensions and using a similar strategy.
(STRATEGIC GROUP)
30. These are goods or services from outside a given
industry that perform similar or the same functions
as a product that the industry produces.
(SUBSTITUTE PRODUCTS)
31. This is composed of dimensions in the broader
society that influence an industry and the firms within
it. - GENERAL ENVIRONMENT
32. This is a condition in the general environment that, if
exploited effectively, helps a company reach
strategic competitiveness. –OPPORTUNITY
33. It is a group of firms producing products that are
close substitutes. – INDUSTRY

34. These are companies or networks of companies that
sell complementary goods or services that are
compatible with the focal firm’s good or service.
– COMPLEMENTORS
35. Media content has moved from paper, tape, and film
to a digital world based on internet technology. From
the perspective of the five forces model, which force
is most relevant here? – SUBSTITUTES
36. Is concerned with a society’s attitudes and cultural
values. - SOCIOCULTURAL SEGMENT
37. Refers to the nature and direction of the economy in
which a firm competes or may compete.
- ECONOMIC ENVIRONMENT
38. Acts that are not conforming to a high moral
standard – UNETHICAL
39. It entails the study of all segments in the general
environment and is critically important to the firms'
efforts to understand trends in the general
environment and to predict their implications.
– SCANNING
40. It refers to potential and actual changes in the
physical environment and business practices that
are intended to positively respond to those changes
with the intent of creating a sustainable environment.
- SUSTAINABLE PHYSICAL ENVIRONMENT
SEGMENT
41. The objective of this is to determine the timing and
significance of the effects of environmental changes
and trends that have been identified. – ASSESSING
42. It is a segment that includes the institutions and
activities involved in creating new knowledge and
translating that knowledge into new outputs,
products, processes, and materials.
-TECHNOLOGICAL SEGMENT
43. It is a common exit barriers the firms faces that is
often based on government concerns for job losses
and regional economic effects; more common
outside the united states - GOVERNMENT AND
SOCIAL RESTRICTIONS
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44. These are commonly analyzed n a global basis
because of their potential effects across countries'
borders and because many firms compete in global
markets -DEMOGRAPHIC SEGMENT
45. Refers to a condition in the general environment that
may hinder a company's efforts to achieve strategic
competitiveness. - THREAT
46. Are goods or services from outside a given industry
that perform similar or the same functions as a
product that the industry produces. – SUBSTITUTE
PRODUCTS
47. Products that lose their value rapidly with the
passage of time – PERISHABLE PRODUCTS
48. What the competitor is doing and can do, is revealed
by its: - CURRENT STRATEGY.
49. These are a superior source of capabilities and
subsequently, core competencies. – INTANGIBLE
RESOURCES.
III. ENUMERATION
1. Enumerate the demographic segments – Population
Size, Age Structure, Geographic Distribution, Ethnic
Mix, And Income Distribution.
2. What are the three parts of the external environment
that affect a firm's strategic actions? - General,
Industry and Competitor
3. The four dimension of the competitors analysis.
- Future Objectives, Current Strategy, Assumption,
Strength And Weaknesses
4. Give at least 3 environmental segments.
- Demographic, Economic, Political/Legal,
Sociocultural, Technological, Global, Sustainable
Physical Environment.
5. Give at least three practices that are widely viewed
as unethical and often are illegal as well. -Blackmail,
Eavesdropping, Trespassing, Stealing
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6. Conditions Affecting Managerial Decisions about

Resources, Capabilities and Core Competencies.
–Uncertainty, Complexity And Intraorganizational
Conflicts

7. Give at least two criteria of Sustainable Competitive

Advantage. – Valuable, Rare, Costly to Imitate and
Nonsubstitutable.

IV. EXPLANATION
1. Why does the government often restrict entry into
some industries?
Because of the need to provide quality services or
the desire to protect jobs

2. What is the relationship between customer's

switching cost and the level of threat of substitute
products?
The relationship between customer's switching cost
and the level of threat of substitute products is
inversely proportional. If the customer’s switching
costs are low, meaning there is little if anything
stopping the consumer from purchasing the
substitute instead of the industry’s product, then the
threat of substitute products is high.

V. Fill in the Blanks

1. Coca-Cola and PepsiCo have been accused of

contributing to the obesity problem in the United
States. This accusation comes from the ______
segment of the general environment
- Sociocultural

2. The general environment is composed of dimension

in the __________ that influence an industry and the
firms within it. - Broader Society.

3. Economies of scale are derived from

_____________ through experience efficiency
improvements through experience as a firm grows. -
Incremental Efficiency Improvements