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

| September 28, 2018

1. The Chapter 2 Opening Case suggests that in
the future, BP and all otheroil and gas firms should expect regulatory change
in the political/legal segment of the general environment.

2. The recent joint ventures formed formed by BP
with Russian and Indian partners show the importance of the technological
segment of the general environment that BP and other integrated oil firms have
to deal with when contending with scarce resources (Chapter 2 Opening Case).

3. The external environment facing business
stays relatively constant over time.

4. Demographic, economic, political/legal,
sociocultural, technological, global, and physical are the seven elements
comprising the industry environment.

5. Firms can directly control the elements of
the seven segments of the general environment.

6. To successfully deal with today’s external
environment and to achieve strategic competitiveness, firms must be aware and
fully understand the different segments of that environment.

7. The recent bankruptcy filings by General
Motors and Chrysler Corporation illustrate that firms cannot directly control
the general environment’s segments.

8. The industry environment directly influences
the firm and its competitive actions and responses.

9. Competitor analysis is focused on the factors
and conditions influencing an industry’s profitability potential.

10. When firms analyze the external environment, they typically have
complete and unambiguous data.

11. Microsoft’s ability to achieve strategic competitiveness if
affected by the threat of smartphones surpassing personal computer sales in the
near future.

12. Monitoring involves the development of a forecast of what might
happen at a future point in time.

13. Scanning involves detecting meaning through early signals of
environmental trends.

14. When Philip Morris International studies the cigarette tax
policies of various nations, it is engaged in the forecasting component of the
environmental analysis process.

15. The objective of assessing the external environment is to
determine the timing and importance of the effects of environmental changes and
trends on the strategic management of the firm.

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