CBME

Industry analysis is also referred to as external strategic management audit.

• True

• False

An external audit focuses on identifying and evaluating trends and events within the control of management.

• True

• False

The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business.

• True

• False

External audits attempt to identify key variables that offer actionable responses.

• True

• False

Five major categories of external variables are: (1) economic forces, (2) social and cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5) demographic forces.

• True

• False

As many managers and employees as possible should be involved in the process of performing an external audit.

• True

• False

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental and technological trends.

• True

• False

Freund argues that key external factors must not be hierarchical.

• True

• False

Research findings suggest that a greater percentage of a firm’s profitability can be explained by the industry than can be explained by the firm’s internal factors.

• True

• False

n economic trend in America is the increasing numbers of two-income households.

• True

• False