When the External Environment Is Unstable and in a State

question 33

Multiple Choice

When the external environment is unstable and in a state of flux:

• A)The firm itself, composed of resources and capabilities, may be a more stable basis for defining its identity and mission
• B)A market-focused strategy may provide enough stability and consistency of direction for the firm to establish its strategy
• C)The analysis of customers' needs takes too long.
• D)Efforts must be devoted to stabilize this external environment or to understand it enough to predict its future states

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Definitions:

Expected Return

The anticipated return on an investment, considering both the probability and the impact of different outcomes.

Portfolio Standard Deviation

A measure of the volatility of the returns on a portfolio, indicating the portfolio's overall risk level.

Countercyclical Stock

A type of stock whose performance is inversely related to the overall economic cycle, often performing better during economic downturns.