SPP Strategic Analysis & Environmental Scanning 4 — Questions and Answers
Question 1: During an industry life cycle analysis, which stage is characterized by slowing growth, consolidation among competitors, and emphasis on cost efficiency?
- Introduction
- Growth
- Maturity (Correct answer)
- Decline
Correct answer: Maturity
In the maturity stage, market growth slows, weaker competitors exit, and surviving firms compete primarily on price and operational efficiency.
Question 2: A strategist performing stakeholder analysis assigns stakeholders to categories based on their level of power and interest. This technique is known as:
- Stakeholder salience mapping
- Power-interest grid (Correct answer)
- RACI matrix
- Balanced scorecard
Correct answer: Power-interest grid
The power-interest grid (Mendelow's matrix) categorizes stakeholders by their power to influence the organization and their level of interest in it.
Question 3: Which of the following best describes 'competitive intelligence' in the context of environmental scanning?
- Illegal acquisition of proprietary competitor information
- The systematic collection and analysis of publicly available information about competitors and the competitive environment (Correct answer)
- An internal audit of a firm's competitive strengths
- A quarterly report prepared for the board of directors
Correct answer: The systematic collection and analysis of publicly available information about competitors and the competitive environment
Competitive intelligence uses ethical, legal means to gather and analyze information about competitors, customers, and the broader market.
Question 4: The 'VRIO' framework evaluates resources based on whether they are Valuable, Rare, Inimitable, and Organized. What does an asset that is Valuable but NOT Rare imply?
- Sustained competitive advantage
- Competitive parity, not a source of advantage (Correct answer)
- Temporary competitive advantage
- Competitive disadvantage
Correct answer: Competitive parity, not a source of advantage
A resource that is valuable but not rare is likely possessed by many competitors, resulting in competitive parity rather than advantage.
Question 5: Which environmental scanning technique involves systematically gathering expert opinions through multiple anonymous rounds of questionnaires with feedback?
- Focus groups
- SWOT analysis
- Delphi method (Correct answer)
- Environmental impact assessment
Correct answer: Delphi method
The Delphi method uses structured, iterative expert surveys with anonymized feedback to build consensus on future trends and uncertainties.
Question 6: In strategic analysis, 'strategic groups' refers to:
- Executive leadership teams responsible for strategy formulation
- Clusters of firms within an industry that follow similar strategies along key dimensions (Correct answer)
- Cross-functional teams formed to execute strategic initiatives
- Industry consortia formed for lobbying purposes
Correct answer: Clusters of firms within an industry that follow similar strategies along key dimensions
Strategic groups are clusters of rivals within an industry that adopt similar strategies regarding product scope, pricing, and market focus.
Question 7: A company discovers through environmental scanning that a major supplier is planning to vertically integrate forward into the company's market. Under Porter's Five Forces, this development most directly intensifies which force?
- Threat of new entrants (Correct answer)
- Rivalry among existing competitors
- Bargaining power of suppliers
- Threat of substitutes
Correct answer: Threat of new entrants
A supplier integrating forward into the buyer's market constitutes a new entrant threat, increasing the threat of new entrants.
SPP Strategic Analysis & Environmental Scanning 4
During an industry life cycle analysis, which stage is characterized by slowing growth, consolidation among competitors, and emphasis on cost efficiency?