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84 PART 2 • STRATEGY FORMULATION

13. Why is inclusion of about 20 factors recommended in the EFE Matrix rather than about 10
factors or about 40 factors?
14. In developing an EFE Matrix, would it be advantageous to arrange your opportunities
according to the highest weight, and do likewise for your threats? Explain.
15. In developing an EFE Matrix, would it be best to have 10 opportunities and 10 threats, or
would 17 opportunities (or threats) be fine with 3 of the other to achieve a total of 20 factors
as desired?
16. Could/should critical success factors in a CPM include external factors? Explain.
17. Explain how to conduct an external strategic-management audit.
18. Identify a recent economic, social, political, or technological trend that significantly affects
the local Pizza Hut.
19. Discuss the following statement: Major opportunities and threats usually result from an inter-
action among key environmental trends rather than from a single external event or factor.
20. Identify two industries experiencing rapid technological changes and three industries that are
experiencing little technological change. How does the need for technological forecasting
differ in these industries? Why?
21. Use Porter’s Five-Forces Model to evaluate competitiveness within the U.S. banking
industry.
22. What major forecasting techniques would you use to identify (1) economic opportunities
and threats and (2) demographic opportunities and threats? Why are these techniques most
appropriate?
23. How does the external audit affect other components of the strategic-management process?
24. As the owner of a small business, explain how you would organize a strategic-information
scanning system. How would you organize such a system in a large organization?
25. Construct an EFE Matrix for an organization of your choice.
26. Make an appointment with a librarian at your university to learn how to use online databases.
Report your findings in class.
27. Give some advantages and disadvantages of cooperative versus competitive strategies.
28. As strategist for a local bank, explain when you would use qualitative versus quantitative
forecasts.
29. What is your forecast for interest rates and the stock market in the next several months?
As the stock market moves up, do interest rates always move down? Why? What are the
strategic implications of these trends?
30. Explain how information technology affects strategies of the organization where you worked
most recently.
31. Let’s say your boss develops an EFE Matrix that includes 62 factors. How would you suggest
reducing the number of factors to 20?
32. Discuss the ethics of gathering competitive intelligence.
33. Discuss the ethics of cooperating with rival firms.
34. Visit the SEC Web site at www.sec.gov, and discuss the benefits of using information
provided there.
35. Do you agree with I/O theorists that external factors are more important than internal factors
to a firm’s achieving competitive advantage? Explain both your and their position.
36. Define, compare, and contrast the weights versus ratings in an EFE Matrix.
37. Develop a Competitive Profile Matrix for your university. Include six factors.
38. List the 10 external areas that give rise to opportunities and threats.

Notes

1. York Freund, “Critical Success Factors,” Planning Review 7. Jon Swartz, “Ex-Facebook COO Gets
16, no. 4 (July–August 1988): 20. Top Job at MySpace,” USA Today (April 27,
2. S&P Industry Surveys, Beverage Industry, 2005. 2009): 7B.
3. John Miller, “Nations Rush to Establish New Barriers to 8. Evan Perez, “Computer Spies Breach Fighter-Jet Project,”
Trade,” Wall Street Journal (February 6, 2009): A1. Wall Street Journal (April 21, 2009): A1.
4. Jon Swartz, “MySpace Forges Ahead Despite Really 9. Kenneth Sawka, “Demystifying Business Intelligence,”
Tough Times,” USA Today (February 4, 2009): 3B. Management Review (October 1996): 49.
5. Joe Mullich, “10 Industries That Wireless Will Change,” 10. John Prescott and Daniel Smith, “The Largest Survey
Wall Street Journal (April 1, 2009): A12. of ‘Leading-Edge’ Competitor Intelligence
6. Bill Saporito, “Companies That Compete Best,” Fortune Managers,” Planning Review 17, no. 3 (May–June
(May 22, 1989): 36. 1989): 6–13.