TEST BANK FOR STRATEGIC
MANAGEMENT, TEXT AND CASES, 7TH
EDITION BY GREGORY DESS, G.T. (TOM)
LUMPKIN, ALAN EISNER, GERRY
MCNAMARA
, Chapter 02
Analyzing the External Environment of the Firm
True / False Questions
1. Environmental scanning and competitor intelligence provide important inputs for forecasting
activities.
True False
2. A hard trend is something that might happen and for which the probability that it might happen can
be estimated.
True False
3. A soft trend is a projection based on measureable facts, events, or objects. It is something that will
happen.
True False
4. The aging of the population is a hard trend.
True False
2-1
,5. A number of choices government officials make are based on projections about future interest
rates. The projections are soft trends.
True False
6. Environmental monitoring deals with tracking changes in environmental trends that are often
uncovered during the environmental scanning process.
True False
7. Competitor Intelligence (CI) is a tool that can provide management with early warnings about both
threats and opportunities.
True False
8. Competitive intelligence generally does not benefit very much from gathering information on
competitors from sources in the public domain.
True False
9. Even with all of the advances in recent years, forecasting is typically considered more of an art
than a science and it is of little use in generating accurate predictions.
True False
10. Scenario planning is usually concerned with short-term forecasts.
True False
11. The strengths and weaknesses of a SWOT analysis refer to the external conditions of the firm.
True False
2-2
, 12. The opportunities and threats of a SWOT analysis refer to the internal conditions of the firm.
True False
13. To understand the business environment of a particular firm, you need to analyze both the general
environment and the firm industry and competitive environment.
True False
14. Although changes in the general environment may often adversely or favorably impact a firm, they
seldom alter an entire industry.
True False
15. The impact of a demographic trend varies across industries.
True False
16. A major sociocultural trend in the United States is the increased educational attainment by
women.
True False
17. Technological innovations can create entirely new industries and alter the boundaries of
industries.
True False
18. There is generally a weak relationship between equity markets (e.g., New York Stock Exchange)
and economic indicators.
True False
2-3
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