Chapter 2—The External Environment: Opportunities, Threats, Competition, and Competitor Analysis

| September 28, 2018

16. Age structure, geographic
distribution, income distribution, interest rates, and process innovations are
all elements of concern when studying the demographic segment of the general

17. In recent times, businesspeople have become more confident in the
ability of economists to provide valid and reliable predictions about the
world’s economic environment.

18. The political/legal segment of the general environment is the
arena in which organizations and interest groups compete for attention,
resources and a voice in the laws and regulations guiding interactions among

19. Legislation introduced in the U.S. Congress during the early
tenure of the Obama administration intended to reduce the amount of work U.S.
companies outsource is an example of a potential change in the sociocultural
segment of the general environment.

20. The European sovereign-debt crisis and political upheavals in
Tunisia, Libya, Bahrain and Syria
illustrate uncertainties in the political/legal segment of the general
environment that could affect the performance of business firms.

21. Developing a political strategy by the newly formed General Motors
would likely be ineffective as firms are generally unable to influence the
political/legal environment.

22. Although health care reform legislation was passed in the early
part of the Obama administration, it continues to be a bone of contention
especially since the 2010 midterm election and attempts have been made to
repeal it in many states. These
attitudes about health care reform make up the sociocultural segment of the
general environment.

23. The technological segment includes the institutions and activities
involved with creating new knowledge and translating that knowledge into new
outputs, products, processes, and materials.

24. Early adopters of new technology often achieve higher market
shares and higher returns than later adopters of the technology.

25. Contrary to popular belief, the global segment of the external
environment does not provide many opportunities for firms such as H.J. Heinz,
SAB Miller, and Citigroup, all of which
recently experienced low growth and profits coming from emerging

26. Globalfocusing is often used by firms with high levels of
international operations who further increase their internationalization by
focusing on global niche markets.

27. It is uncommon for a large firm to receive a majority of revenues
from outside its home country.

28. Global warming and energy consumption are aspects of the
technological environment segment that firms should monitor.

29. PepsiCo’s strategy called “capital performance with a purpose”
links green efforts in ll businesses to the bottom line. This is an example of addressing concerns in
the physical segment of the general environment.

30. The Chapter 2 Strategic Focus notes that McDonald’s has pursued
green restaurant design, sustainable packaging, waste management, and energy
efficiency all of which are aspects of the technological segment of the general

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