Discussion Questions
Questions for Discussion
1. Briefly describe two important recent changes in the remote environment of U.S. business in each
of the following areas:
a. Economic.
b. Social.
Various sources can be used to identify changes in the above mentioned areas. Magazines such as
BusinessWeek and Fortune, newspapers such as The New York Times and The Wall Street Journal,
and various Internet sites are good sources.
a. The slow recovery in the U.S. economy is an economic trend worth investigating. Companies
b. Fortune, in a recent issue, described some implications of the aging of America. Baby
c. A recent political trend relates to an economic trend cited above. As more and more jobs are
moving offshore, political leaders are getting into the act in an effort to assuage their local
constituencies. Some states are contemplating enacting laws against moving jobs overseas.
d. The Internet continues to have a profound technological impact on business and society. It
e. Changes in the weather worldwide are a major ecological trend. The changes are caused
2. Describe two major environmental changes that you expect to have a major impact on the
wholesale food industry in the next 10 years.
The wholesale food industry is likely to be affected by two major trends. Technology has
changed the order process by shortening the cycle between order and delivery. A wholesale
3. Develop a competitor profile for your college and for the college geographically closest to yours.
The discussion provided in the section on “Operating Environment” provides a good template to
4. Assume the invention of a competitively priced synthetic fuel that could supply 25 percent of
U.S. energy needs within 20 years. In what major ways might this change the external
environment of U.S. businesses?
The invention of a competitively priced synthetic fuel would have profound effect on the external
environment of U.S. businesses. It would:
Threaten U.S. oil companies such as ExxonMobil if they are not part of the synthetic fuel
Students can identify a wide variety of impacts of this new product. The instructor can require
the students to come up with various scenarios to gauge the impact of synthetic fuel.
5. With your instructor’s help, identify a local firm that has enjoyed great growth in recent years.
It is likely that students will determine that the selected firm’s success can be attributed to all
6. Choose a specific industry and, relying solely on your impressions, evaluate the impact of the
five forces that drive competition in that industry.
Industries that students will be familiar with include:
fast food
They are likely to have strong impressions of each of these industries, primarily as customers,
7. Choose an industry in which you would like to compete. Use the five-forces method of analysis
to explain why you find that industry attractive.
The instructor may have to help the students get started by forcing them to think of products they
8. Many firms neglect industry analysis. When does this hurt them? When does it not?
While the above four are typically reasons why identifying firm boundaries is important, it also
9. The model below depicts industry analysis as a funnel that focuses on remote-factor analysis to
better understand the impact of factors in the operating environment. Do you find this model
satisfactory? If not, how would you improve it?
Firms are affected by factors in the external environment. The chapter identifies three
subcategories of the external environment: remote, industry, and operating. The industry
environment may be a threat or an opportunity, depending upon the industry in question. In other
words, the same trend can be viewed differently through the lens of the industry environment.
10. Who in a firm should be responsible for industry analysis? Assume that the firm does not have a
strategic planning department.
Typically, it should be the responsibility of the CEO or the top management team. Only they are